niv.of  ill. 


LOCAL  TAXATION 


BEING 


A REPORT  OF  THE  COMMISSION  APPOINTED  BY  THE  GOVERNOR  OF  NEW 
YORK,  UNDER  THE  AUTHORITY  OF  THE  LEGISLATURE,  TO  REVISE 
THE  LAWS  FOR  THE  ASSESSMENT  AND  COLLECTION 
OF  STATE  AND  LOCAL  TAXES. 


DAVID  A.  WELLS, 
EDWIN  DODGE, 
GEORGE  W.  CUYLER, 


Commissioners. 


. THE  LIBRARY  OF  THE 

SEP  7-  1938 

UNIVERSITY  OF  ILLINOIS 


“I  INSIST  THAT  A PEOPLE  OAN  NOT  PROSPER  WHOSE  OFFICERS  EITHER  WORK  OR  TELL  LlES.  TlIERE  IS 
not  an  Assessment  Roll  made  out  in  this  State  that  does  not  Work  and  Tell  Lies.”— Speech  of 
M.  I.  Townsend,  Delegate  at  Large,  Constitutional  Convention  of  New  York,  1SG7-68  ( Debates , vol.  iii.,  p.  1945). 


REVISED  AND  CORRECTED  EDITION.. 


NEW  YORK: 

HARPER  & BROTHERS,  PUBLISHERS, 

FRANKLIN  SQUARE. 

18  71. 


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LOCAL 


TAXATION : 


> . 


BEING 

A REPORT  OF  THE  COMMISSION  APPOINTED  BY  THE  GOVERNOR  OF  NEW 
YORK,  UNDER  THE  AUTHORITY  OF  THE  LEGISLATURE,  TO  REVISE 
THE  LAWS  FOR  THE  ASSESSMENT  AND  COLLECTION 
OF  STATE  AND  LOCAL  TAXES. 


DAVID  A.  WELLS,  j 

EDWIN  DODGE,  > Commissioners . 

GEORGE  W.  CUYLER,  ) 


“I  INSIST  THAT  A PEOPLE  CAN  NOT  PeOSPER  WHOSE  OFFICERS  EITHER  WORK  OP.  TELL  LlES.  THERE  18 
not  an  Assessment  Roll  made  out  in  this  State  that  does  not  Work  and  Tell  Lies.”  — Speech  of 
M.  I.  Townsend,  Delegate  at  Large , Constitutional  Convention  of  New  York,  1S67-68  ( Debates , vol.  iii.,  p.  1945). 


REVISED  AND  CORRECTED  EDITION. 


N Ef  YORK: 

HARPER  & BROTHERS,  PUBLISHERS, 

FRANKLIN  SQUARE. 

1871. 


' 


' ■ • ••■•  »•  , - 
' 

"*•  '*  • V - — 


•\  •'  . '■  . • 


i ...  . ? 


■ 


■ 


. 


* 

- 


■ 


STATE  OF  NEW  YOKE. 


[No.  89.] 

IN  ASSEMBLY, 

February  16, 1871. 


REPORT 

OF  THE  COMMISSIONERS  APPOINTED  BY  THE  GOVERNOR  TO 
REVISE  THE  LAWS  FOR  THE  ASSESSMENT  AND  COLLECTION 
OF  TAXES. 

' STATE  OF  NEW  YORK : 

Executive  Chamber,  ) 
Albany,  February  1 6th,  1871.) 

To  the  Legislature : 

A joint  resolution  was  passed  by  the  Legislature,  at  its  last  session,  authoriz- 
ing me  to  appoint  three  commissioners  “ to  revise  the  laws  for  the  assessment 
and  collection  of  taxes.”  I appointed  David  A.  W ells,  Edwin  Dodge,  and  George 
W.  Cuyler ; and  I now  transmit  their  report.  This  report  was  not  completed 
in  time  to  allow  such  an  examination  of  it,  on  my  part,  as  would  enable  me  to 
form  an  opinion  of  the  expediency  of  adopting  the  recommendations  made.  It 
is  apparent,  however,  that  the  report  contains  a great  amount  of  information 
and  of  argument  which  will  afford  most  valuable  aid  to  the  Legislature  and  the 
people  in  coming  to  an  intelligent  judgment  upon  the  questions  involved.  No 
subject  is  more  important  than  this  one  to  the  interests  of  the  people,  and  con- 
sequently none  is  more  worthy  of  your  attention. 

The  tax  system  prevalent  in  the  other  States  is,  in  its  main  features,  the  same 
as  in  our  own  ; and  the  information  furnished  in  this  report  will  be  very  valua- 
ble, not  only  to  the  people  of  our  own  State,  but  to  the  country  at  large.  It  is 
right  that  New  York,  the  State  foremost  in  population  and  wealth,  should  take 
the  lead  in  investigating  this  great  question,  and  in  adopting  such  improvements 
as  are  shown  to  be  valuable. 

The  interests  of  the  people  require  a method  of  taxation  at  once  equitable, 
effective,  and  free  from  unnecessary  oppression ; one  which  will  yield  the  requi- 


8 


THE  GOVERNOR’S  MESSAGE. 


site  revenue  while  subjecting  them  as  little  as  possible  to  inquisitorial  vexation, 
and  which  shall  be  attended  with  the  least  expense  for  official  services,  and  af- 
ford the  fewest  temptations  to  fraud,  concealment,  or  evasion. 

If  the  commissioners  have  succeeded  in  devising  such  a system,  it  should  be 
adopted  as  early  as  possible.  In  view  of  the  importance  of  the  subject  to  the 
general  welfare,  I earnestly  commend  the  report  to  your  immediate  and  careful 
consideration. 

Unless  otherwise  instructed  by  the  Legislature,  the  commissioners  will 
deem  themselves  authorized  to  go  on  and  complete  their  work  by  preparing 
and  submitting  such  laws  as  they  think  necessary  to  the  carrying  out  of 
their  views. 

JOHN  T.  HOFFMAN. 


Note  by  the  Chairman  of  the  Board  of  Commissioners. — The  edition  of  this  Report 
published  under  the  authority  of  the  Legislature  of  New  York  was,  to  a certain  extent,  imperfect, 
both  in  respect  to  some  omissions  and  a lack  of  clearness  in  the  statement  of  certain  propositions. 
In  the  present  edition  these  imperfections,  so  far  as  discovered,  have  been  corrected,  and  the 
Report  in  every  way  made  more  clearly  expressive  of  the  arguments  and  conclusions  of  the 
Commissioners. 


DAVID  A.  WELLS. 


LOCAL  TAXATION, 


Albany,  February,  1871. 

Sir, — The  undersigned  members  of  the  com- 
mission appointed  by  the  Governor  of  the  State 
of  New  York,  under  the  provisions  of  a joint 
resolution  of  the  Legislature,  passed  April  26th, 
1870,  have  the  honor  to  submit  the  following  re- 
port : 

ORGANIZATION  OF  THE  COMMISSION. 

The  following  are  the  provisions  of  the  joint 
resolution  above  referred  to,  constituting  the 
commission : 

State  of  New  Yokk,  \ 

In  Assembly — Albany,  April  9 th,  1870.  j 

Resolved  (if  the  Senate  concur),  That  the 
Governor  designate  and  appoint  three  suitable 
persons  to  revise  the  laws  for  the  assessment  and 
collection  of  taxes,  and  whose  duty  it  shall  be  to 
report  to  the  next  Legislature,  within  ten  days 
after  the  commencement  of  the  session. 

By  order. 

C.  W.  Armstrong,  Cleric. 


In  Senate— April  2 6th,  1S70. 

Concurred  in  without  amendment. 

Hiram  Calkins,  Cleric. 

The  commission  thus  authorized,  became 
fully  organized  in  October,  1870,  by  the  appoint- 
ment of  the  following  members : David  A. 
Wells,  Edwin  Dodge,  and  George  W.  Cut- 
ler, and  has  since  then  been  actively  engaged 
in  the  discharge  of  the  duties  assigned  it. 

CONDITIONS  PRECEDENT  TO  THE  INVESTIGA- 
TION. 

Previous  to  the  war,  or  at  a date  not  far  an- 
tecedent to  that  period,  the  United  States  was  in 
the  anomalous  position  of  a great  nation,  com- 
posed of  numerous  separate  States,  which,  both 
collectively  and  individually,  were  not  only  prac- 
tically free  from  debt,  but  in  which,  moreover, 
the  small  burden  of  taxation  made  necessary  to 
meet  the  cost  of  a simple  and  economical  ad- 
ministration of  public  affairs,  was  levied  on  a 
people  whose  increase  in  wealth  and  numbers 
was  rapid  and  continuous  without  precedent. 
Under  such  circumstances,  it  was  not  to  be  won- 
dered that  the  matter  of  taxation,  or  the  taking 
of  private  property  for  public  uses,  the  greatest 
and  most  important  function,  except  the  control 
of  the  person  and  the  taking  of  life,  which  the 
State  can  exercise,  was  regarded  as  a matter  of 
comparatively  little  importance ; and  that  the 


systems  for  raising  revenue  in  the  different 
States,  and  by  the  national  government,  grew  up 
under  the  force  of  accident  and  circumstance, 
rather  than  as  the  result  of  consideration  and  in- 
quiry. 

In  short,  the  people  paid  what  was  necessary 
out  of  their  abundance,  and,  in  the  case  of  the 
general  government,  paid  only  indirectly ; and 
were  too  busy  in  developing  the  country  and  in- 
creasing their  individual  possessions  to  take 
much,  if  any,  interest  in  the  subject.  Hence  the 
crudities,  irregularities,  and  absurdities  which 
characterize  the  existing  systems  of  the  United 
States  for  the  raising  of  the  public  revenues,  and 
which,  to  the  student  of  political  economy  and 
finance  in  the  old  world,  who  has  not  fully  rec- 
ognized the  conditions  of  our  previous  national 
growth  and  development,  seem  so  utterly  sur- 
prising, and  so  inconsistent  with  the  general  in- 
telligence and  practical  character  of  the  Ameri- 
can people.  Hence,  the  United  States,  at  this 
period  of  its  history,  repeats  the  experience  of 
all  other  new  States  and  communities  in  respect 
to  matters  of  finance  ;*  originating  theories  and 
adopting  practices  that  find  their  only  parallel 
in  the  records  of  the  Middle  Ages.  Hence,  the 
recent  sober  maintenance  of  a proposition  that  a 
“national  debt  is  a national  blessing;”  or  those 

* It  is  a curious  and  interesting  fact,  first  pointed 
out  by  William  M.  Gouge  (Fiscal  History  of  Texas, 
Phil.,  1852),  that  Texas,  during  her  brief  existence  as  a 
republic  (when  she  was,  in  truth,  an  American  State, 
but  without  the  Union,  and  as  such  free  from  the  re- 
straints imposed  by  the  United  States  Constitution), 
originated  and  repeated  nearly  all  the  fiscal  faults 
which  had  previously  characterized  the  financial  his- 
tory of  older  and  more  important  nationalities  such 
as  unlimited  paper  money,  irredeemable  currency,  ex- 
port duties,  high  ad  valorem  tariffs,  tonnage  taxes, 
banking  on  the  basis  of  land,  foreign  loans,  repudia- 
tion. It  is  also  certain  that  the  United  States  can  not 
claim  the  honor  of  originating  the  brilliant  and  philo- 
sophical idea,  “that  a national  debt  is  a national  bless- 
ing,” as  is  shown  by  the  following  extract  from  a re- 
port of  a committee  of  the  Texas  Congress  (Mr.  Chen- 
oweth,  Chairman),  submitted  December  16, 1837,  which 
reads  as  follows : “An  outstanding  national  debt  may, 
in  many  respects,  be  looked  upon  as  beneficial,  by  a 
community  isolated  and  dependent  as  Texas,  if  the 
creditors,  as  such,  can  afford  us  substantial  patronage. 
And,  until  we  stand  immutable  among  the  nations  of 
the  earth,  your  committee  would  advise  that  the  pe- 
cuniary interests  of  our  creditors  will  excite  for  us  the 
sympathies  and  protection  of  mankind."  One  lesson 
which  Texas  derived  from  her  fiscal  experimentation 
and  bankruptcy  may  be  inferred  from  the  following 
provision  of  her  Constitution  as  a State,  adopted  Au- 
gust, 1845:  “In  no  case  shall  the  Legislature  have 
power  to  issue  * treasury  notes,’  or  paper  of  any  de- 
scription, intended  to  circulate  as  money;”  and  from 
the  following  act  of  her  first  Legislature,  after  admis- 
sion to  the  Union  as  a State : “No  person  or  persons 
within  the  State  shall  issue  any  bill,  promissory  note, 
check,  or  other  paper  to  circulate  as  money.” 


10 


LOCAL  TAXATION. 


other  correlative  absurdities,  now  made  the  basis 
of  the  national  financial  policy,  that- the  pros- 
perity of  the  country  may  be  enhanced  by  the 
maintenance  of  excessive  taxation,  or  what  is 
the  same  thing,  of  excessive  deprivation  ; or  that 
national  growth  may  be  best  promoted  by  the 
continuance  of  a general  and  not  exceptional 
system  of  taxing  the  many  with  special  reference 
to  the  interest  of  a few. 

But,  with  a change  in  the  condition  of  State 
and  local  affairs  growing  out  of  increased  taxa- 
tion, through  the  increase  of  public  expendi- 
tures, the  aggregate  of  taxation  of  the  State  of 
New  York,  for  example,  having  increased  three- 
fold from  1850  to  1860,  or  from  $6,312,787  to 
$18,956,024,  public  attention,  before  dormant 
and  indifferent,  had  begun,  even  previous  to  the 
war,  to  be  awakened  to  the  subject  of  a reform 
in  the  matter  of  local  taxation ; and  since  the 
war  and  its  involved  expenditures  has  added 
to  the  difficulties  of  the  situation,  the  former 
feeling  that  some  better  system  of  raising  State 
revenues,  both  as  respects  law  and  administra- 
tion, than  any  now  existing  was  needed,  has  be- 
come much  more  general  and  intensified. 

THE  RECENT  INCREASE  OF  TAXATION. 

It  is  a digression  at  this  point,  altogether  per- 
tinent to  our  subject,  and  one  always  of  impor- 
tance to  the  public,  to  briefly  call  attention  to 
the  facts  respecting  the  increase  of  taxation 
which  the  nation  during  the  last  ten  years  has 
authorized  and  experienced.  Previous  to  1861, 
the  annual  revenues  of  the  national  government 
derived  from  taxation  had  never  exceeded  $75,- 
000,000,  but  since  then  they  have  risen  in  one 
year  to  an  aggregate  of  over  $550,000,000 ; 
and,  for  the  last  fiscal  year,  were  in  excess  of 
$400,000,000. 

In  the  State  of  New  York  the  aggregate  of 
taxation  has  advanced  from  $20,402,276  in 
1861  to  $50,328,684  in  1870.  In  Massachu- 
setts, during  the  period,  1861  to  1869,  from 
$7,600,000  to  $21,921,569,  and  in  Ohio,  from 
$11,071,000  to  $22,232,877.  In  all  history 
there  is  probably  no  precedent  for  so  rapid  an 
increase  of  public  burdens  within  so  limited  a 
period,  and  the  extent  of  increase  may  be  fur- 
ther illustrated  by  the  circumstance,  that  the 
aggregate  of  local  taxation  in  one  of  the  States 
of  the  Union,  is  at  present  greater  per  capita 
than  that  of  any  other  civilized  community  in 
existence. 

COMPARATIVE  TAXATION  OF  NEW  YORK  AND 
OTHER  STATES. 

The  following  is  an  approximate  exhibit  of 
the  extent  of  local  taxation  in  New  York,  as 
compared  with  that  of  some  other  States  and 
municipalities : 

New  York. — Taking  the  State  of  New  York 
as  a whole,  and  assuming  the  population  (cen- 
sus of  1870)  at  4,364,375,  and  the  aggregate 
of  taxation  (Comptroller’s  Report  of  1871)  at 
$50,328,684,  the  taxation  per  capita  would 
be  $11.55.  Deducting  alike  the  population 


and  taxation  of  the  city  and  county  of  New 
York  from  the  population  and  aggregate  taxa- 
tion of  the  State,  the  per  capita  taxation  of  the 
State  would  be  $7.54. 

Massachusetts. — Population  (census  1870), 
1,457,351 ; aggregate  taxation  (report  Secre- 
tary of  State  1870),  $21,922,569  ; taxation  per 
capita,  $14.35. 

Ohio. — Population  (census  1870),  2,662,214 : 
aggregate  taxation,  1869,  $22,232,877;  taxa- 
tion per  capita,  $8.72. 

Vermont. — Population  (census  1870),  330,- 
552;  aggregate  taxation,  1870  (State,  county, 
and  school  taxes  official,  town  taxes  estimated), 
$1,750,000;  taxation  per  capita,  $5.29. 

AGGREGATE  TAXATION  OF  THE  UNITED  STATES. 

The  above  States  of  New  York,  Massachu- 
setts, Ohio,  and  Vermont  are  the  only  ones 
from  which  the  commissioners  have  been  able 
to  obtain  the  annual  aggregate  of  taxation. 
They,  however,  undoubtedly  represent  the  ex- 
tremes and  the  mean  of  the  per  capita  taxa- 
tion of  the  different  States,  and  afford  data  also 
for  approximately  estimating  the  aggregate  an- 
nual taxation,  national  and  State,  of  the  whole 
country. 

The  revenues  of  the  Federal  Government  for 
the  fiscal  year  ending  June  30th,  1870  (all  of 
which,  with  the  exception  of  a few  millions, 
were  derived  from  direct  or  indirect  taxes), 
were  $411,255,477.  If  we  take  the  per  capita 
rate  of  local  taxation  in  New  York  as  repre- 
senting the  average  rate  of  all  the  States,  then 
the  aggregate  taxation  of  the  whole  country 
for  the  year  1870  (the  population  assumed  at 
39,000,000)  would  have  been  $851,705,000. 
If  the  per  capita  rate  of  Ohio  is  taken  as  the 
average  local  rate  of  the  States,  the  aggregate 
would  be  $751,335,000;  and  if  of  Vermont, 
$627,535,000. 

The  aggregate  per  capita  taxation  of  the 
whole  country,  according  to  these  different  es- 
timates, would  therefore  be  $21.83,  $19.26, 
and  $16.09,  respectively ; the  last  figures  rep- 
resenting probably  the  minimum,  and  indica- 
ting a larger  per  capita  taxation  than  any  mod- 
ern nation  has  ever  before  been  subjected  to, 
continuously,  in  time  of  peace. 

COMPARATIVE  TAXATION  OF  MUNICIPALITIES. 

City  of  New  York. — Population  (census  of 
1870),  927,436 ; aggregate  taxation,  State,  city, 
and  county,  1870,  $25,403,859  ; special  taxes 
for  local  improvements  (estimated),  $2,000,000; 
total  aggregate,  $27,403,859 ; rate,  2.27 ; taxa- 
tion, per  capita,  $29.54.* 

* In  all  of  the  cities  of  which  the  statistics  of  taxa- 
tion are  here  given,  there  are  taxes  additional  to  those 
levied  by  the  State,  city,  and  county,  on  account  of 
local  expenditures  ; such  as  the  widening  of  streets, 
construction  of  sewers,  etc.  These  taxes  are  assessed 
upon  the  localities  which  are  deemed  to  have  been 
benefited,  and  do  not  appear  in  its  general  statements 
which  are  accessible  to  the  public  and  published  by 
the  States.  In  the  case  of  the  cities  of  New  York, 
Rochester,  Buffalo,  Chicago,  Montreal,  Boston,  and  the 
other  cities  of  Massachusetts,  given  in  the  above  table, 
the  aggregate  of  taxes  presented  is  believed  to  include 


LOCAL  TAXATION. 


11 


Brooklyn. — Population  (census  of  1870), 
396,300  ; aggregate  taxation  1870,  $7,897,538; 
rate,  3.87 ; taxation,  per  capita,  $19.02. 

Rochester. — Population,  63,424;  aggregate 
taxation,  State,  county,  and  city  (1869-70), 
$752,223;  rate,  6.70;  taxation  for  local  im- 
provements (estimated),  $200,000  ; total,  $952,- 
223 ; taxation,  per  capita,  State,  county,  and 
city,  $12.05;  State,  county,  city,  and  local, 
$15.25. 

Albany. — Population,  69,482;  aggregate  tax- 
ation, $1,397,780.50  ; rate,  4.57  ; taxation,  per 
capita,  $20.12. 

Montreal. — Population, ,150, 000  (estimated)  ; 
aggregate  city  receipts,  1870,  $783,644 ; taxa- 
tion, per  capita,  $5.23. 

Troy. — Population  (census  1870),  46,428  ; 
aggregate  taxation,  State,  county,  and  city, 
$835,879 ; rate,  4.30  to  5.24 ; taxation,  per 
capita,  $18. 

Boston. — Population  (census  of  1870),  250,- 
701  ; aggregate  of  taxation,  1870,  $9,050,420  ; 
rate,  1.53  ; taxation,  per  capita,  $36.10. 

Philadelphia. — Population  (census  1870), 
657,179;  aggregate  taxation (1870-71),  $9,026,- 
753;  rate,  1.80,  1.20,  90;  taxation,  per  capita, 
$13.73. 

Cincinnati. — Population  (census  1870),  218,- 
900;  aggregate  taxation  (1869),  $4,199,413; 
rate,  3.19  ; taxation,  per  capita,  $19.00. 

Chicago . — Population  (census  1870),  299,- 
117;  aggregate  general  taxation,  $4,139,798; 
(1870)  special,  $2,336,993;  rate,  1.5;  aggre- 
gate, $6,476,791;  taxation,  per  capita,  $21.65. 

Hartford , Conn.,  1869. — Taxation  (city  and 
town),  per  capita,  approximately,  $17.14. 

Providence , R.  I.,  1869: — Taxation,  per  capi- 
ta, $17.54. 

Springfield , Mass.,  1869. — Taxation,  per  capi- 
ta, $14.58. 

Lowell , Mass.,  1869. — Taxation,  per  capita, 
$10.58. 

Worcester , Mass.,  1869. — Taxation,  per  capi- 
ta, $10.95. 

Lynn,  Mass.,  1869. — Taxation,  per  capita, 
$13.20. 

Buffalo , 1870. — Taxation,  per  capita,  $12.33. 

Turning  to  Europe  for  further  illustrations, 
and  selecting  the  two  localities  which  are  be- 
lieved to  afford  examples  of  the  maximum  of 
taxation  for  local  purposes,  we  find  the  facts  in 
respect  to  London  and  Paris  to  be  substantially 
as  follows : 

City  of  London. — The  population  of  the  met- 
ropolitan district  of  city  of  London,  according 
to  the  census  of  1861,  was  2,808,944,  and  the 
aggregate  of  local  taxation  by  city  authorities, 
vestries,  district  boards,  and  the  metropolitan 
board  of  works,  including  also  all  receipts  in 
respect  to  the  poor  (poor  rate)  were  for  the  fiscal 
year,  1867,  £3,291,678,  or  $16,458,390;  the 
whole  indicating  a per  capita  taxation  for  local 
purposes  of  $5.85.  Of  this  amount  £1,753,824, 

all  assessments ; in  the  case  of  the  other  cities,  some 
small  addition  to  the  aggregates  and  per  capita’s  here 
presented  must  he  allowed  for. 


or  $8,769,120,  were  on  account  of  expenditures 
in  respect  to  the  poor ; but  under  this  general 
head  of  expenditures,  are  included  the  expenses 
of  jails  and  houses  of  correction,  of  a class  of 
criminal  prosecutions,  compensation  and  expense 
of  juries,  constables,  and  other  law  officers,  reg- 
istrations of  births,  deaths,  and  marriages,  the 
support  of  the  criminal  insane,  expenses  of  elec- 
tions, public  vaccination,  and  other  like  charges. 
It  should  also  be  stated  that  the  national  govern- 
ment of  Great  Britain  assumes  and  defrays  a 
portion  of  the  expenditures  incident  to  the  city 
of  London,  which,  in  the  United  States,  are  for 
the  most  part  made  a direct  charge  upon  local 
property  exclusively ; such,  for  example,  as  all 
expenditures  on  account  of  public  education,  the 
maintenance  of  local  courts,  public  buildings, 
the  indigent  insane,  fire  department,  etc. ; so 
that  really  the  account  of  municipal  taxation 
above  given  affords  only  an  approximate  indica- 
tion of  the  amount  of  municipal  expenditures. 
On  the  other  hand,  the  national  government 
may  be  supposed  to  reimburse  itself  for  all  mu- 
nicipal expenditures  throughout  the  kingdom  by 
the  imposition  of  the  income  and  stamp  taxes, 
and  by  various  smaller  taxes  on  carriages,  serv- 
ants, etc. 

England  and  Wales. — The  local  taxation  of 
England  and  Wales  by  counties,  “ unions”  and 
parishes  for  1867-68  is  returned  at  £16,783,220 
($83,916, 100).  The  population  of  England  and 
Wales  for  1868  having  been  21,649,377,  the  rate 
per  capita  is  accordingly  $3.87.  This  taxation 
was  assessed  upon  the  rental  value  of  real  prop- 
erty, and  averaged  2s.  10c/.  in  the  pound  upon  the 
gross  estimated  rental.  The  rate,  however,  va- 
ried in  different  counties  from  Is.  6c/.  to  4s.  6c/. 

Paris. — The  yearly  expenditures  of  the  city 
of  Paris  previous  to  the  war  were  reported  as  at 
the  rate  of  about  $25,000,000  per  annum,  of 
which  $18,000,000  were  raised  by  what  are 
known  as  octroi  duties,  or  taxes  in  the  form  of 
a tariff  on  certain  goods,  wares,  and  merchandise 
entering  the  city  of  Paris  from  other  portions  of 
the  French  territory.  The  municipal  expendi- 
tures proper  of  the  city  of  Paris  were,  however, 
so  conjoined  with  those  of  the  imperial  govern- 
ment and  exchequer,  the  two  being  virtually  un- 
der one  and  the  same  direction  and  authority, 
that  no  discrimination  can  well  be  made  between 
them.  Thus,  for  example,  a part  of  the  annual 
expenditure  of  Paris,  above  referred  to,  was  for 
I interest  on  the  debt  created  for  a virtual  rebuild- 
ing and  reconstruction  of  the  city ; an  act  au- 
thorized by  the  government,  and  considered  in 
part,  at  least,  as  a public  enterprise  for  national 
I as  much  as  for  municipal  purposes. 

It  thus  appears,  from  the  above  statements, 
that,  with  the  exception  possibly  of  Paris,  the 
United  States  as  a whole,  the  State  of  Massa- 
chusetts, and  the  city  of  Boston,  take  precedence 
j over  all  the  governments  and  communities  in  the 
! civilized  world  in  respect  to  the  extent  and 
j weight  of  their  taxation  ; and  it  may  be  further 
noted,  in  respect  to  Massachusetts  and  Boston, 
that,  notwithstanding  the  comparative  magni- 


12 


LOCAL  TAXATION. 


tude  of  their  taxation,  the  annual  aggregate  re- 
ceipts from  the  same  have  not  been  sufficient 
of  late  years  to  prevent  an  annual  increment 
of  both  the  public  and  municipal  indebtedness. 
That  this  view  of  the  comparative  taxation  of 
Massachusetts  is  not  altogether  new,  is  shown 
by  the  fact  that,  in  1868,  the  Hon.  George  Wal- 
ker, then  chairman  of  the  finance  committee  of 
the  State  House  of  Representatives,  called  the 
attention  of  the  Legislature  to  the  circumstance 
that  the  amount  paid  in  taxation,  national  and 
State,  by  Massachusetts,  for  the  five  years  from 
1862  to  1867  inclusive,  amounted  to  an  estimated 
aggregate  of  $153,000,000,  or  at  the  rate  of  about 
$30,000,000  per  annum  on  a currency  valuation 
in  1865  of  $1,010,000,000.* 

THE  RADICAL  EVIL  OF  TAXATION. 

But  although  taxation  is  deprivation,  or  the 
taking  away  of  a portion  of  one’s  wages  or  in- 
come for  other  than  personal  purposes,  it  is  not 
by  any  means  to  be  argued  that  taxation,  in  it- 
self, is  necessarily  an  evil.  On  the  contrary,  it 
can  probably  be  demonstrated  that  there  is  no 
one  act  which  can  be  performed  by  a communi- 
ty, which  brings  in  so  large  return  to  the  credit 
of  civilization  and  general  happiness,  as  the  ju- 
dicious expenditure,  for  public  purposes,  of  a 
fair  percentage  of  the  general  wealth  raised  by 
an  equitable  system  of  taxation.  The  fruits 
of  such  expenditure  are  general  education  and 
general  health ; improved  roads,  diminished  ex- 
penses of  transportation,  and  security  for  life 
and  property.  And  it  will  be  found  to  be  a 
general  rule,  that  no  high  degree  of  civilization 
can  be  maintained  in  a community,  and  indeed 
that  no  highly  civilized  community  can  exist, 
without  comparatively  large  taxation  ; the  con- 
verse of  this  proposition,  however,  at  the  same 
time  not  being  admitted,  that  the  existence  of 
high  taxes  are  necessarily  a sign  of  high  civili- 
zation. Thus,  for  example,  observations  made 
during  the  past  summer  in  the  German  States 
which,  since  1866,  have  been  forcibly  incorpo- 
rated with  Prussia,  show  that,  notwithstanding 
the  former  have  been  subjected  to  a greatly 


* “ Mr.  Speaker,  Massachusetts  is  in  no  condition  to 
make  a wasteful  expenditure  of  money.  We  are  now 
burdened  with  taxes  to  a degree  which  it  would  be 
difficult  to  parallel  elsewhere;  to  a degree  which 
would  have  hound  a poorer  people  to  the  earth ; to  a 
degree  which  no  people,  not  even  the  people  of  Massa- 
chusetts, can  permanently  endure.  I have  taken  pains 
to  ascertain  the  taxes  paid  in  the  last  five  years— 1862 
to  1867  inclusive.  They  are  as  follows : Direct  taxes 
by  the  State,  $17,500,000 ; local  taxes  at  $1.20  to  $100  on 
$1,000,000,000,  $60,000,000 ; United  States  in  proportion 
as  the  population  of  1,200,000  bears  to  25,000,000,  viz. ; 
internal  revenue,  $45,000,000;  customs,  $30,588,000. 
Total,  $153,088,000.  Yearly  average,  $30,617,000.  The 
valuation,  according  to  the  United  States  census  of 
1860,  was  815  millions  in  gold,  and  in  1865,  by  the 
State  census,  1010  millions  in  currency.  Probably 
there  had  been  no  gain  of  wealth  in  the  interval,  as 
the  years  were  years  of  war,  and  the  price  of  gold  in 
1865  averaged  more  than  150.  Taking  the  mean  of 
these  valuations,  the  taxes  paid  fully  equalled  3£  per 
cent.  And  this,  sir,  was  not  levied  upon  productive 
property  alone,  but  on  all  the  property,  productive 
and  unproductive,  which  stands  upon  the  assessors’ 
books.”— Speech  of  Hon.  George  Walker,  of  Massachu- 
setts, in  the  House  of  Representatives,  on  the  Hoosac 
Tunnel,  May  28, 1808. 


increased  burden  of  taxation,  they  have  at  the 
same  time  enjoyed  a greater  measure  of  pros- 
perity; the  same  being  mainly  due  to  an  im- 
proved administration,  of  which  the  increased 
taxation  was  a necessary  incident. 

In  short,  taxation  in  itself  is  no  more  of  an 
evil  than  any  other  necessary  and  desirable 
form  of  expenditure;  but  it  is  an  evil  when 
taxation  is  rendered  excessive  through  inju- 
dicious or  wasteful  expenditures ; or  when,  by 
reason  of  ill  adjustment,  the  levy  of  the  tax  is 
made  an  occasion  for  the  collection  from  the 
people,  through  the  enhancement  of  profits  and 
prices,  of  a far  greater  sum  than  is  requisite  to 
meet  the  public  requirements.  Of  these  evils 
the  first  is  especially  characteristic,  at  the  pres- 
ent time,  of  State  and  municipal  taxation ; and 
the  second,  of  national  taxation,  or  of  the  taxa- 
tion by  the  United  States  in  general.  Of  the 
two  the  latter  is  by  far  the  greatest ; for  when 
taxation — as  in  the  case  of  the  tariff  on  the  im- 
port of  specific  articles,  or  through  the  increased 
cost  of  transportation  through  the  watering  of 
railroad  stocks,  or  by  the  use  of  a vicious  cur- 
rency— is  levied  upon  products  which,  in  the 
nature  of  raw  material,  passes  through  success- 
ive stages  of  transformation  or  elaboration  be- 
fore it  comes  to  the  consumer,  the  tax  from  the 
beginning  forms  an  element  of  the  cost,  on 
which  a percentage,  to  represent  profit,  interest, 
and  risks  (usually  not  less  than  ten),  is  levied 
by  each  person  through  whose  hands  the  prod- 
uct passes  as  dealer  or  elaborator.  It  thus 
admits  of  demonstration  that  the  $101,000,000 
paid  on  the  principal  of  the  public  debt  during 
the  fiscal  year  1869-70,  and  supposing  the  same 
(as  we  legitimately  may)  to  have  been  raised 
by  taxation  under  the  existing  tariff,  was  really 
and  directly  increased  to  at  least  $150,000,000 
before  the  same  was  paid  by  the  consumers  of 
the  taxed  articles,  and  indirectly  to  a much 
larger  figure.  But  of  the  practical  effects  of 
excessive  and  ill-adjusted  taxation,  the  people 
of  the  United  States  at  present  need  no  illus- 
trations. That  they  have  been  able  to  with- 
stand the  burden,  National  and  State,  imposed 
upon  them  for  the  past  ten  years,  and  yet  live 
and  prosper,  is  the  most  positive  proof  that  can 
be  afforded  of  the  great  natural  resources  and 
productive  powers  of  the  country. 

PREVIOUS  EFFORTS  FOR  THE  REFORM  OF  EXIST- 
ING SYSTEMS  OF  LOCAL  TAXATION. 

In  addition  to  general  public  discussion,  the 
feeling  of  the  necessity  for  reform  in  the  exist- 
ing systems  of  local  taxation,  has,  moreover, 
found  expression  during  the  last  ten  years,  in 
the  attempt  on  the  part  of  the  Legislatures  of 
at  least  five  different  States  to  provide  for  the 
work  by  the  creation  of  boards  or  commissions, 
to  whom  the  whole  subject  of  inquiry  and  revis- 
ion was  committed,  with  instructions  to  report 
by  bill  or  otherwise. 

In  this  work  the  State  of  New  York  took  the 
lead  by  the  appointment,  in  1862,  by  the  Legis- 
lature, of  a committee  on  the  part  of  both  the 


LOCAL  TAXATION. 


13 


Senate  and  the  House,  of  which  Mr.  James  A. 
Bell,  of  the  Senate,  was  chairman,  which  com- 
mittee subsequently  (February,  1863)  presented 
a report,  accompanied  by  a bill  and  a digest  of 
the  mode  and  machinery  of  taxation  then  ex- 
isting in  the  other  States  of  the  Union.* * * § *  The 
example  of  New  York  was  subsequently  follow- 
ed by  the  States  of  Pennsylvania,!  New  Jersey,! 
and  Connecticut, § each  of  which,  during  the 
years  1867  and  ’68,  authorized  the  appointment 
of  commissioners  to  take  into  consideration  the 
subject  of  local  taxation,  with  a view  to  the  re- 
vision or  amendment  of  existing  laws ; and  all 
of  which  commissions,  under  instructions,  sub- 
mitted reports  to  the  Legislatures  of  their  re- 
spective States  during  the  year  succeeding  to 
their  appointment. 

The  State  of  Illinois  during  the  year  1870 
also  authorized  the  State  board  for  the  equaliza- 
tion of  taxes  to  prepare  and  present  an  entire 
new  code  of  the  levy  and  collection  of  taxes  in 
that  State.|| 

It  is  also  interesting  here  to  note,  that  it  does 
not  appear  that  the  Legislatures  of  the  four 
States  first  mentioned,  in  even  a single  in- 
stance, subsequently  paid  any  attention  what- 
ever to  the  work  or  recommendations  of  the 
commissioners  they  had  thus  authorized  ; a re- 
sult which,  coinciding  with  the  record  of  a simi- 
lar recent  experience  in  respect  to  Congress 
and  the  national  government,  would  appear  to 
indicate  the  scope  and  object  of  all  commissions 
appointed  by  legislative  bodies  to  independent- 
ly investigate  financial  or  social  questions,  to  be 
more  properly  the  collection  and  intelligent 
presentation  of  facts,  and  the  discussion  of  the 
practicability  and  direction  of  remedial  meas- 
ures, rather  than  the  detailed  elaboration  of  sys- 
tems, with  the  expectation  that  the  same  are  to 
be  immediately  invested  by  the  proper  authori- 
ties with  the  force  of  law.  And,  furthermore, 
any  commission,  such  as  above  referred  to, 
which  properly  discharges  the  duties  assigned 
to  it  is  likely  to  occupy  advanced  positions,  and 
do  more  than  merely  reflect  to  the  average  of 


* Report  on  the  State  Assessment  Laws  by  the  joint 
select  committee  appointed  by  the  Legislature  of 
1862.  Transmitted  Feb.  2, 1863.  Albany : Weed,  Par- 
sons & Co.,  printers,  1863.  Digest  of  taxation  in  the 
States ; under  three  heads : 1.  Mode  and  Machinery 
of  Taxation  ; 2.  Standard  of  valuation ; 3.  Property  lia- 
ble to  and  exempt  from  Taxation.  By  Alfred  B. 
Street.  Published  under  the  direction  of  the  Joint 
Committee  of  the  New  York  Legislature  appointed  to 
revise  the  Assessment  Laws.  Albany:  Weed,  Par- 
sons & Co.,  1S63. 

t Commonwealth  of  Pennsylvania.  Report  of  the 
Auditor-General,  Secretary  of  the  Commonwealth 
and  State  Treasurer,  on  the  Tax  Laws  of  the  State, 
made  in  compliance  with  joint  resolutions  of  the  Leg- 
islature. Approved  April  12, 1867. 

t Report  of  the  Commissioners  to  revise  the  Tax 
Laws  of  the  State  of  New  Jersey,  together  with  “ an 
act  concerning  taxes.”  Submitted  to  the  General  As- 
sembly January  3d,  1868.  Charles  S.  Olden,  chairman. 
Trenton,  N.  J.,  1868. 

§ Report  of  the  Special  Commissioners  on  the  Sub- 
ject of  Taxation,  with  bill  in  form  accompanying,  N. 
II.  Morgan,  chairman.  Printed  by  order  of  the  Legis- 
lature. New  Haven,  1868. 

II  An  Act  for  the  Assessment  of  Property  and  the 
Levy  and  Collection  of  Taxes.  Prepared  by  the  State 
Board  for  the  Equalization  of  Taxes  in  Illinois.  Sub- 
mitted to  the  Legislature  January,  1871. 


existing  public  sentiment ; and  as  all  experi- 
ence has  thus  far  shown  that  legislative  bodies 
in  the  United  States  rarely,  if  ever,  act  in  ad- 
vance of  public  opinion,  it  would  seem  abso- 
lutely essential  that  the  material  of  information 
should  be  first  afforded  to  the  public,  with  time 
for  thought  and  discussion,  before  reform  in  the 
way  of  legal  enactments  can  be  reasonably  ask- 
ed for  or  expected. 

During  the  year  the  subject  of  local  taxation 
has  also  been  brought  prominently  before  the  at- 
tention of  the  British  public,  through  two  agen- 
cies : 

1.  By  the  creation  of  a parliamentary  com- 
mission, consisting  of  twenty-one  members,  of 
which  the  Rt.  Hon.  George  J.  Goschen,  president 
of  the  poor-law  board,  and  a member  of  the  cab- 
inet, is  chairman ; and, 

2.  By  the  offer  of  a prize  by  one  of  the  lead- 
ing politico-economic  societies  of  Great  Britain 
(the  Statistical  Society  of  London),  for  the  prep- 
aration of  the  best  essay  on  the  ‘ ‘ subject  of  local 
taxation,”  the  same  to  be  presented  and  pub- 
lished early  in  the  year  1871.* 

The  first  report  of  the  parliamentary  com- 
mission above  referred  to,  which  was  submitted 
in  July,  1870, f shows,  however,  that  no  essential 
change  in  the  existing  system  of  local  taxation 
in  Great  Britain  was  contemplated  by  the  British 
government ; the  instructions  given  to  the  com- 
mission limiting  their  inquiries  to  the  consider- 


* Prof.  Stanley  Jevons,  in  his  address  as  president 
of  the  economic  section  of  the  British  Association  for 
the  Advancement  of  Science  at  the  annual  meeting, 
September,  1870,  thus  alludes  to  the  condition  of  local 
taxation  in  the  united  kingdom.  He  says : “I  may 
point  to  local  taxation  especially  as  a subject  requir- 
ing attention,  even  more  than  any  branch  of  the  gen- 
eral revenue.  Until  within  the  last  few  years  the  im- 
portance of  the  local  rates  „was  to  a great  extent  over- 
looked, because  there  were  no  adequate  accounts  of 
their  amounts.  The  returns  recently  obtained  by  the 
overnment  are  even  now  far  from  complete,  but  it 
ecomes  apparent  that  at  least  one-fourth  part  of  the 
revenue  of  the  kingdom  is  raised  by  these  neglected 
rates  and  tolls.  Their  amount  is  more  than  equal  to 
the  whole  of  the  customs  duties,  upon  the  reform  of 
which  we  have  been  engaged  for  thirty  years.  Never- 
theless we  continue  to  allow  those  rates  to  be  levied 
substantially  according  to  an  act  passed  in  the  reign 
of  Elizabeth.  The  recent  partial  inquiry  by  a select 
committee  has  chiefly  proved  the  extent  and  difficulty 
of  the  reform  which  is  needed.  Whole  classes  of  prop- 
erty which  were  unrated  three  centuries  ago  are  un- 
rated now,  and  it  will  be  a matter  of  great  difficulty 
to  redress  in  an  equitable  manner  inequalities  which 
have  been  so  long  tolerated.  The  subject  is  of  the 
more  importance  because  there  is  sure  to  be  a con- 
tinuous increase  of  local  taxation.  We  may  hope  for 
a reduction  of  the  general  expenditure,  and  we  shall 
expect  rather  to  reduce  than  raise  the  weight  of  du- 
ties. But  all  the  more  immediate  needs  of  society, 
boards  of  health,  medical  officers,  public  schools,  ref- 
ormations, free  libraries,  highway  boards,  main  drain- 
age schemes,  water  supplies,  purification  of  rivers,  im- 
proved police,  better  poor  laws,  medical  service— these 
and  a score  of  other  costly  reforms  must  be  supported 
mainly  out  of  the  local  rates.  Before  the  difficulties 
of  the  subject  become  even  greater  than  they  now  are, 
I think  the  principles  and  machinery  of  local  taxation 
should  receive  thorough  consideration.  At  present  the 
complexity  of  the  laws  relating  to  poor  rates  is  some- 
thing quite  appalling,  and  it  is  the  herculean  nature 
of  the  reform  required  which  perhaps  disinclines  finan- 
cial reformers  from  attacking  it." 

t “Report  from  the  select  committee  on  local  taxa- 
tion, together  with  the  proceedings  of  the  committee. 
Minutes  of  evidence  and  appendix.  House  of  Com- 
mons, July  15, 1870." 


14 


LOCAL  TAXATION. 


ation  merely  of  changes  in  the  detail  of  assess- 
ments, and  in  the  constitution  of  the  bodies  to 
whom  the  administration  of  the  rates  is  locally 
intrusted.* 

PRESENT  NECESSITY  FOR  REFORM  IN  THE  EX- 
ISTING TAX  SYSTEM  OF  NEW  YORK. 

But  whatever  may  have  been  the  reasons 
which  led  the  Legislature  of  the  State  of  New 
York,  in  1862,  to  the  conclusion  that  an  in- 
quiry, with  a view  to  the  revision  of  the  exist- 
ing tax  system,  was  then  expedient,  the  reasons 
which  now  exist  for  the  authorization  and  pros- 
ecution of  a similar  work  are  far  more  impera- 
tive. In  1862,  the  aggregate  valuation  of  the 
property  of  the  State  for  tax  purposes  being 
$1,449,303,948,  the  aggregate  of  all  taxes  was 
$19,456,288,  while  the  average  rate  was  1.342. 
In  1869,  however,  the  aggregate  valuation  being 
$1, 860, 120, 770,  the  aggregate  of  taxation  had  ris- 
en to  $46,161,531,  and  the  average  rate  to  2.482. 
In  other  words,  if  we  take  a period  of  ten  years, 
viz.,  from  1860  to  1869  inclusive,  we  find  that, 
while  the  valuation  of  the  property  of  the  State 
for  tax  purposes  has  increased  during  that  time 
but  30.3  per  cent.,  the  aggregate  of  the  sums 
raised  by  taxation  has  increased  during  the 
same  period  140  per  cent.,  and  the  average  rate 
eighty-five  per  cent.  Or,  to  state  the  case  dif- 
ferently, the  aggregate  taxation  of  the  State, 
from  1845  to  the  present  time,  has  increased 
from  about  three-fourths  of  one  per  cent,  upon 
the  dollar  of  valuation,  representing  a tax  of 
$4, 170,524,  to  one  and  three-tenths  in  1860,  rep- 
resenting a tax  of  $18,956,024,  and  two  and 
four-tenths  in  1869,  representing  a tax  of  $46,- 
161,531.  Estimated  per  capita,  the  aggregate 
of  State  taxation,  which  in  1860  was  4.88  cents, 
has  since  increased  until  it  is  now  (1870)  equiva- 
lent to  $11.55  for  each  man,  woman,  and  child 
that  make  up  the  entire  population  of  the  State. 

Within  the  last  few  years,  moreover,  such 
changes  have  been  made  in  the  tax  systems  of 
several  of  the  States  contiguous  to  New  York, 
either  by  special  enactments,  variations  in  the 
methods  of  valuation  and  assessing  of  property, 
or  a diminished  necessity  for  the  raising  of  rev- 
enue, as  to  place  New  York  relatively  at  great 
disadvantage,  and  urgently  call  for  the  adoption 
of  measures  on  the  part  of  the  State,  which  will 
at  once  prevent  the  arrest  of  its  development 
and  the  deviation  of  its  legitimate  capital,  pop- 
ulation, and  enterprise. 

Thus,  for  example,  the  Legislature  of  the 
State  of  New  Jersey,  during  the  year  1869,  ex- 
empted, in  certain  of  the  counties  and  cities  of 


* “ Ordered,  That  a select  committee  be  appointed 
to  inquire  and  report  whether  it  be  expedient  that 
the  charges  now  locally  imposed  on  the  occupiers  of 
ratable  property  should  be  divided  between  the  own- 
ers and  occupiers,  and  what  changes  in  the  consti- 
tution of  the  local  bodies  now  administrating  rates 
should  follow  such  division. 

“ Ordered,  That  it  be  an  instruction  to  the  committee 
to  inquire  further  into  the  proper  classification  of 
rates  with  a view  to  determine  their  proper  incidence 
upon  the  owners  or  occupiers  of  such  ratable  proper- 
ty.—House  of  Commons,  Feb.  21, 18T0." 


that  State  which  lie  contiguous  to  New  York, 
all  mortgages  from  taxation,  by  a provision  of 
law  which  reads  as  follows : 11  And  all  mort- 
gages upon  estates , chattels , or  personal  proper- 
ty, taxable  by  law , within  said  counties  of  Hud- 
son, Union , Essex , and  the  city  of  Brunswick, 
Middlesex  county,  and  the  county  of  Passaic,  ex- 
cept the  townships  of  West  Milford,  Pompton, 
and  W iyne,  for  State,  county,  township,  and  city 
purposes,  shall  be  exempt  from  taxation , when  in 
the  hands  of  any  inhabitant,  corporation,  or  asso- 
ciation, residing  or  located  in  said  counties  or 
cities .”  Approved  Apnl  2, 1869  ; Laws  of  New 
Jersey , 1869,  page  1225. 

It  is  therefore  obvious  that  the  State  of  New 
Jersey,  by  the  action  of  its  Legislature,  has  not 
only  removed,  in  the  districts  and  cities  above 
specified,  all  obstacles  in  the  way  of  the  reten- 
tion within  its  own  borders  of  so  much  of  the 
capital  of  its  citizens  as  tends  to  investments 
in  bonds  and  mortgages,  but  has  also  offered  a 
strong  inducement  to  the  inhabitants  of  the 
State  of  New  York,  and  especially  of  its  great 
commercial  city,  to  change  their  residence  and 
become  citizens  of  New  Jersey ; while  New 
York,  on  the  other  hand,  by  continuing  its  tax- 
es on  bonds  and  mortgages,  in  fact  reduces  the 
rates  of  interest  on  this  species  of  investment 
to  a rate  less  than  that  paid  by  government, 
and  many  other  securities,  and  thus  limits  and 
obstructs  the  flow  of  capital  in  that  channel, 
which,  perhaps,  more  than  any  other  contributes 
to  small  local  enterprises;  gives  employment 
and  homes  to  the  working-classes  of  its  popula- 
tion, and  augments  the  amount  of  visible,  tangi- 
ble property  available  for  taxation  for  State  pur- 
poses. 

In  Pennsylvania,  furthermore,  another  of  the 
States  which  is  especially  brought  into  compe- 
tition with  New  York,  personal  property , under 
a system  of  taxation  which  is  in  many  respects 
far  more  liberal  than  that  of  any  other  State  in 
the  Union,  is  either  wholly  exempt  from  taxa- 
tion, or  is  taxed  to  so  small  an  extent  as,  in 
comparison  to  New  York,  to  practically  amount 
to  exemption ; and,  although  Pennsylvania  is 
guilty  of  the  apparent  barbarism  and  inconsist- 
ency of  imposing  a tax  of  four  cents  per  ton  on 
the  anthracite  coal  mined  and  carried  by  trans- 
portation companies  within  her  borders,  while 
at  the  same  time  she  demands  protection  from 
the  national  government  against  the  competi- 
tion of  other  coal,  the  product  of  foreign  coun- 
tries, yet,  owing  to  the  monopoly  which  the 
State  possesses  of  this  article,  the  tax  imposed 
on  it  is  paid,  in  the  main,  by  citizens  of  other 
States,  rather  than  by  her  own  population.* 


* It  is  proper  to  here  state  that  the  tax  on  anthra- 
cite coal  was  imposed  by  the  State  of  Pennsylvania 
as  a compensation  for  the  abandonment  in  18G7  of  a 
tax  on  tonnage  carried  from  a point  within  to  a point 
without  the  State ; which  tax,  by  a decision  of  the 
courts,  was  declared  to  be  in  violation  of  the  Consti- 
tution of  the  United  States,  and  released  several  of 
the  great  mining  and  transportation  companies  sup- 
plying coal  to  the  Northern  markets  from  a tax  which 
was  paid  by  similar  companies,  operating  exclusively 
within  the  State.  But  Pennsylvania,  with  a shrewd 


LOCAL  TAXATION. 


15 


In  forty-three  out  of  the  sixty-five  counties 
of  Pennsylvania,  “all  mortgages,  judgments, 
recognizances,  or  moneys  owing  upon  articles 
of  agreement  for  the  sale  of  real  estate”  are  ex- 
empt from  all  taxation,  except  for  State  pur- 
poses ; while  the  maximum  of  tax  at  present 
levied  by  the  State  upon  this  species  of  proper- 
ty, in  common  with  all  other  moneys  loaned  at 
interest,  is  only  three-tenths  of  one  per  cent. 

Shares  of  national  banks,  located  within  the 
State  of  Pennsylvania,  and  of  banks  and  savings 
institutions  incorporated  by  the  State,  are  taxa- 
ble for  State  purposes  at  the  rate  of  three-tenths 
of  one  per  cent,  per  annum,  and  are  also  liable 
to  taxation  for  school  and  other  local  purposes 
at  the  same  rate  as  is  imposed  on  other  mon- 
eyed capital.  But  in  case  any  bank  or  savings 
institution  shall  elect  to  collect  from  its  share- 
holders a tax  of  one  per  centum  on  the  par  val- 
ue of  all  its  shares,  and  pay  the  same  annually 
into  the  State  treasury,  then  all  the  shares,  cap- 
ital, and  profits  of  such  banks  shall  be  exempt 
from  all  further  taxation  under  the  laws  of 
Pennsylvania.  As  a tax  of  one  per  cent,  on 
the  capital  of  the  national  banks  alone,  of  Penn- 
sylvania, exclusive  of  all  State  banks  and  sav- 
ings institutions,  would  have  yielded  a revenue 
to  the  State  in  1869  of  over  $500,000 ; and  as 
only  $187,000  was  paid  from  this  source  during 
that  year  into  the  State  treasury,  it  is  evident  that 
the  actual  taxation  on  the  banks  of  Pennsyl- 
vania was  much  less  than  one  per  cent. ; and,  in 
fact,  in  all  the  principal  money  centres  is  known 
to  have  been  but  the  minimum  provided  for  by 
law,  viz.,  three-tenths  of  one  per  cent. 

The  revenue  of  the  State,  for  State  purposes, 
is  derived  mainly  from  the  following  sources : 
1st.  A tax  of  one-half  of  one  mill  on  each  one 
per  cent,  of  all  dividends  which  may  be  declared 
by  the  corporations  of  the  State,  except  banks, 
savings  institutions,  and  foreign  insurance  com- 
panies ; and  in  case  that  no  dividends  are  de- 
clared, then  a tax  of  three  mills  on  the  valua- 
tion of  the  stock.  Building  associations,  plank- 
road  and  turnpike  companies,  are  not  liable  to 
any  tax  when  no  dividends  are  declared.  The 
receipts  to  the  State  treasury  from  this  source, 
for  the  year  1869,  constituted  the  largest  single 
item  of  the  State  revenue,  and  amounted  to 
$1,037,172.  2d.  Taxes  on  tonnage  carried  over 
the  lines  of  the  various  transportation  compa- 
nies operating  exclusively  within  the  State:  viz., 
two  cents  on  the  product  of  mines,  three  on  the 
product  of  forests  and  agriculture,  and  five  on 
manufactures  and  general  merchandise.  The 
receipts  from  this  source  for  the  year  1869,  and 


regard  for  her  own  interest,  was  careful  not  to  im- 
pose this  tax  upon  “bituminous”  coal,  of  which  the 
State  has  not  a monopoly,  and  the  incidence  of  which 
might  therefore  fall  upon  her  own  citizens,  and  work 
to  the  advantage  of  foreign  producers ; and  she  also 
exempted  the  companies  concerned  from  all  tax  upon 
the  anthracite  coal  consumed  in  their  own  business. 

The  amount  of  revenue  derived  by  the  State  of 
Pennsylvania  from  the  tax  on  anthracite  coal  in  18G9 
was  $159,577 ; while  the  amount  of  revenue  derived 
by  the  national  government  from  the  tariff  on  all  im- 
ported coal  for  the  fiscal  year  18G9-70  was  $526,190. 


certain  commutations  of  the  same,  amounted 
to  $659,900.  3d.  Taxes  on  personal  property, 

which  are  made  up  mainly  of  the  following 
items : Money  at  interest,  furniture,  horses,  and 
cattle,  three-tenths  of  one  per  cent. ; pleasure- 
carriages,  one  per  cent. ; gold  watches,  one  dol- 
lar ; silver  watches,  seventy  - five  cents ; other 
watches  fifty  cents.  The  inconsiderable  nature 
of  these  taxes  may  be  inferred  from  the  circum- 
stance that  the  whole  revenue  derived  from  the 
same  for  the  year  1869  was  $454,873.  4th.  A 
tax  of  three-fourths  of  one  per  cent,  on  the  gross 
receipts  of  every  transportation  company  of  the 
State  liable  to  the  payment  of  a tonnage  tax. 
The  income  from  this  source  in  1869  was 
$373,420.  5th.  A tax  of  five  per  cent,  on  every 
dollar  of  interest  paid  by  the  corporations  of  the 
State  to  its  bondholders  or  creditors;  in  lieu 
of  which  the  principal  sums  from  the  interest 
of  which  the  said  tax  is  deducted  are  exempt 
from  assessment  and  taxation  for  State  purposes, 
as  personal  property.  The  revenue  from  this 
source  for  1869  was  $340,816.  6th.  A tax  of 
three  per  cent,  on  the  annual  net  earnings  of  ev- 
ery private  banker,  broker,  incorporated  banking 
and  savings  institution,  express  company,  and 
all  other  corporations  of  the  State,  except  those 
paying  a tonnage  tax,  incorporated  banks,  and 
insurance  companies,  and  foreign  insurance  com- 
panies. The  revenue  from  this  source  for  1869 
was  $310,895.  7th.  A license  tax  of  five  hun- 
dred dollars  per  annum  on  every  foreign  insur- 
ance company  doing  business  in  the  State  ; and 
a tax  of  three  per  cent,  on  the  entire  amount 
of  prerfiiums  or  commissions  received.  The 
receipts  from  this  source  for  1869  were  $226,- 
226.  8th.  Taxes  on  the  enrollment  of  laws, 
by  which  is  to  be  understood  a taxation  im- 
posed on  the  enrollment  of  all  acts  of  the  Leg- 
islature passed  for  the  benefit  of  private  par- 
ties ; the  same  varying  from  $1000  on  the  in- 
corporation of  banks  with  a capital  of  $1,000,- 
000 ; two  hundred  dollars  on  the  incorpora- 
tion of  manufacturing,  mining,  or  oil  compa- 
nies ; and  one  hundred  dollars  on  transportation 
companies  ; down  to  thirty-seven  dollars  for  acts 
of  divorce  and  miscellaneous  private  bills  for 
claims,  relief,  etc.  The  revenue  from  this  source 
for  the  year  1869  was  $21,000.  9th.  Taxes  on 
the  emoluments  of  offices,  by  which  is  to  be  un- 
derstood a tax  of  two  per  cent,  on  so  much  of  the 
salary  or  emolument  of  offices  of  the  State,  or 
corporations  created  by  the  State,  as  is  in  excess 
of  two  hundred  dollars.  The  revenue  from 
this  source  for  1869  was  $16,644.  10th.  Re- 
tailers’ licenses,  $422,273.  11th.  Tavern  li- 
censes, $289,555.  12th.  Other  licenses,  i.  e., 

amusements,  peddlers,  restaurants,  etc.,  $69,- 
800.  13th.  Taxes  on  collateral  inheritances, 

$227,328.  14th.  Taxes  on  wills,  writs,  and 

deeds,  $99,000.  15th.  Auction  duties  and  com- 

missions, $72,000 ; the  sum  total  of  State  rev- 
enue for  the  year  1869,  from  the  above  and  a 
few  other  miscellaneous  sources  being  $5,086,- 
679,  as  compared  with  $8,138,000,  the  State 
revenue  of  New  York  from  taxes  for  the  corre- 


10 


LOCAL  TAXATION. 


sponding  period;  or,  in  respect  to  population, 
$1.86^  per  capita  in  Pennsylvania,  as  compared 
with  $1  .SGj2^  per  capita  in  New  York.  But  the 
manner  in  which  taxation  is  apportioned  in  the 
State  of  Pennsylvania,  whether  intentionally  or 
accidentally,  so  as  to  enhance  in  the  least  degree 
the  cost  of  both  capital  and  of  production,  is 
better  shown  by  an  exhibit  of  the  actual  work- 
ings of  the  system  for  the  years  1869  and  1870, 
in  the  two  great  financial  and  industrial  cities 
of  the  State,  viz.,  Philadelphia  and  Pittsburg. 

Taxation  of  Philadelphia. — In  the  city  of 
Philadelphia,  for  the  year  1870,  the  taxation  for 
all  purposes  other  than  for  State  taxes  was  as- 
sessed and  collected  on  the  following  valua- 
tion : 


Real  estate $470,851,800 

Personal  property 8,188,873 

Total $479,040,673 


The  aggregate  valuation  of  these  two  items 
of  real  and  personal  property  was  subdivided  as 
follows : 

REAL  ESTATE. 


Valuation.  Rate.  Tax. 

City  proper $426,783,036  $1.80  per  hundred.  $7,682,094 

Suburban 24,649,289  1.20  per  hundred.  295,791 

Farm 19,419,475  .90  per  hundred.  174,775 


Total  valuation....  $470,851,800  Total  tax $8,152,660 


The  taxation  on  the  valuation  of  personal 
property  of  $8,188,873  was  assessed  on  the  fol- 
lowing items  exclusively: 

Valuation.  Rate. 

Furniture $5,917,426  $1.80  per  hundred. 

Horses  and  cattle 1,750,873  1.80  per  hundred. 

Pleasure-carriages 520,574  1.80  per  hundred. 

Total  valuation $8,188,873  Total  tax $147,398 


Tax. 

$106,513 

31,515 

9,370 


The  whole  city  revenue,  therefore,  from  direct 
taxation  for  the  year  in  question  was  $8,300,- 
061,  to  which  may  be  added  the  sum  of  $892,- 
000  for  water-rents,  and  about  $125,000  for 
rents  of  markets,  wharves,  fees,  and  sundry  small 
licenses.  In  addition  to  the  above,  the  city  of- 
ficials collected  for  the  State  during  the  same 
year  a taxation  of  $135,840,  which  was  assess- 
ed on  the  following  items  and  valuations  and 
at  the  following  rates  : 


Carriages,  pleasure 

Carriages  to  hire 

Emoluments  of  office... 
Gold  watches,  number. . 
Silver  watches,  number. 
Other  watches,  number. 


Amount. 

Rate. 

Tax. 

. $28,856,137 

3 mills. 

$86,568 

5,917,425 

3 mills. 

17,752 

1,750,873 

3 mills. 

5,252 

520,574 

1 per  cent. 

5,205 

38,305 

3 mills. 

. 114 

376,240 

2 per  cent. 

7,524 

11,939 

$1.00 

11,939 

903 

75  cents. 

677 

49 

50  cents. 

24 

260,650 

3 mills. 

781.00 

. $37,733,096 

Total  State  tax.. 

$135,840 

Taxation  of  Pittsburg. — In  the  city  of  Pitts- 
burg, with  a population  of  86,255,  the  munici- 
pal taxation  for  all  purposes  for  1870,  except 
schools,  was  returned  at  $699,700,  and  derived 
mainly  from  the  following  sources  : 

1.  A tax  of  eleven  mills  on  the  valuation  of 
all  property  taxable  for  all  State  and  county 
purposes,  except  such  portions  of  the  city  as 
are  designated  as  “rural,”  in  which  the  tax  is 
as  two-thirds  of  said  rate,  or  at  seven  and  one- 


third  mills  on  each  dollar  of  valuation.  This 
tax  affords  a revenue  of  $184,000. 

2.  A tax  termed  the  “business  tax,”  qr  a tax 
upon  the  sales  and  business  in  the  city,  which 
is  assessed  as  follows : Ten  mills  on  the  dollar 
of  all  sales  of  retail  liquor  dealers,  and  on  the 
commissions  of  all  forwarding  and  commission 
merchants  and  merchandise  brokers ; one  and 
three-fourth  mills  on  the  sales  of  all  goods,  wares, 
and  merchandise  other  than  liquors  at  retail ; 
and  on  the  sales  of  all  goods  at  auction,  except 
sales  of  real  estate,  stocks,  and  steamboats,  on 
which  the  tax  is  at  the  rate  of  one  mill ; one 
half  of  one  mill  on  each  dollar  of  the  yearly 
business  of  brokers,  banks,  and  banking  institu- 
tions ; one  and  three-fourth  mills  on  the  yearly 
receipts  of  insurance,  express,  and  telegraph 
companies,  and  five  mills  on  the  dollar  of  the 
yearly  receipts  of  persons  engaged  in  keeping 
bowling-alleys  or  billiard-tables.  The  receipts 
from  these  taxes  for  the  year  1870  were  return- 
ed at  $200,000. 

3.  Water  rents,  $140,000. 

4.  For  the  payment  of  indebtedness  of  the 
city,  a tax  of  three  mills  on  all  property  taxa- 
ble for  State  or  county  purposes,  $42,000. 

5.  Rent  of  wharves  and  markets,  $66,000. 

6.  Vehicle  licenses,  $18,000. 

7.  Mayor’s  office,  $24,000. 

8.  City  gauger,  $5,000. 

With  this  exhibit,  therefore,  of  the  amount 
and  apportionment  of  taxation  in  Pennsylvania 
and  its  principal  cities,  it  can  not  be  doubted 
that  great  and  substantial  advantages  are  offer- 
ed to  capital  seeking  investment  in  real  estate, 
mortgages,  or  the  business  of  manufacturing, 
mining,  or  shipping,  by  this  State  over  and 
above  any  which  are  afforded  under  the  existing 
laws  of  the  State  of  New  York,  and  in  the  event 
of  free  banking  under  national  laws  (a  question 
merely  of  time),  and  with  the  circumstances  of 
relative  State  taxation  remaining  unchanged, 
it  can  not,  moreover,  be  a question  in  what  State 
bank  capital,  especially  if  intended  to  be  used 
in  connection  with  circulation,  will  inevitably 
tend  to  concentrate.  The  results  of  the  census 
of  1870  would  also  indicate  that  the  liberal  sys- 
tem of  taxation  existing  in  Pennsylvania,  as 
compared  to  that  of  New  York,  had  already  be- 
gun to  exercise  a marked  influence  upon  the 
comparative  growth  of  the  two  States — the  com- 
parative growth  of  New  York,  the  State  richest 
in  capital,  the  most  numerous  in  population, 
the  “ entrepot  ” of  the  majority  of  the  foreign 
commerce,  and  the  centre  of  the  commercial  ex- 
changes of  the  country,  having  been  much  less 
for  the  last  decade  than  that  of  Pennsylvania. 
Thus,  for  example,  while  the  latter  State,  start- 
ing in  1860  with  a population  of  2,906,215,  has 
gained  609,778  in  population,  the  State  of  New 
York,  starting  with  a population  of  3,880,735, 
has  gained  only  483,640. 

On  this  point,  also,  the  chairman  of  the  Board 
of  Revision  of  Taxes  of  Philadelphia,  adds  his 
testimony  in  the  following  extract  from  a letter 
addressed  to  the  commissioners.  He  says : “ I 


LOCAL  TAXATION. 


17 


think  you  are  right  in  your  conclusion  that  we 
owe  much  of  our  prosperity  to  the  freedom  of 
capital  from  taxation  ; and  I have  argued  with 
our  people,  ever  since  it  has  been  my  province 
to  execute  our  tax  laws,  that  Philadelphia  owed 
her  prosperity  mainly  to  that,  and  that  her  man- 
ufacturers prospered  under  her  laws,  notwith- 
standing our  citizens  complained  of  heavy  tax- 
es. It  is  natural  that  New  York  city  (being 
the  chief  port  of  the  country  and  the  importing 
centre)  should  attract  most  of  the  mercantile 
capital  from  her  (being  only  100  miles  distant), 
just  as  Newark  and  other  cities  are  more  or 
less  affected  in  some  instances.  But  we  have 
prospered  in  other  branches  of  industry ; and 
the  fact  that  in  each  of  the  years  18G9  and 
1870  more  than  4500  dwelling-houses  have  been 
erected,  which  are  occupied  as  soon  as  they  are 
finished,  is  evidence  of  that  prosperity.” 

Again,  attention  is  also  called  to  the  fact  that 
in  Lower  Canada,  which  borders  upon  New 
York  upon  the  north,  there  is  comparatively  no 
taxation  upon  bank  capital,  money  at  interest, 
manufacturing  establishments,  shipping,  or  other 
personal  property;*  and  that  the  two  neighbor- 
ing States  of  Maine  and  Vermont,  with  a view 
of  developing  their  own  resources,  increasing 
their  wealth,  and  attracting  population,  have 
each,  within  the  last  two  years,  enacted  laws  to 
exempt  from  taxation  for  a period  of  years  (in 
Maine  ten , and  Vermont  Jive ),  manufacturing 
establishments  of  whatever  character,  together 
with  all  machinery  and  capital  employed  in  op- 
erating the  same.f 

It  is  also  to  be  remembered  that  the  State  of 
New  York  is  yearly  becoming  less  and  less  of  a dis- 
tinctively agricultural  and  more  of  a commercial 
and  manufacturing  State;  and  that,  through  the 
inclusion  within  its  borders  of  the  harbor  and 
city  which  is  the  entrepot  of  two-thirds  of  all 

* For  a detailed  exhibit  ot  the  system  of  local  taxa- 
tion in  Montreal  and  the  Province  of  Quebec,  refer- 
ence is  made  to  the  appendix  to  this  report  marked  A. 

t In  Maine  the  exemption  of  manufacturing  estab- 
lishments is  made  to  depend  upon  the  consent  of  the 
towns  where  the  same  are  located.  In  Vermont  the 
exemption  has  been  made  absolute  by  the  State  for 
a period  of  five  years  from  the  date  of  the  commence- 
ment of  operations.  The  following  is  the  Vermont 
act  in  question : 

“An  Act  in  Amendment  of  an  Act  entitled  ‘An  Act 
to  encourage  Manufactures'  approved  November  16, 
1869. 

“ Section  1.  Section  1 of  an  act  entitled  ‘An  Act  to 
encourage  Manufactures,’  approved  November  16, 
1869,  is  hereby  amended  and  construed  so  as  to  read 
as  follows : 

“All  manufacturing  establishments  erected  after 
the  16th  day  of  November,  1S69,  and  all  such  as  were 
then  in  process  of  construction  and  not  then  com- 
pleted, and  all  the  machinery  and  capital  used  for 
operating  the  same,  together  with  all  such  machinery 
hereafter  put  into  buildings  heretofore  erected  but  not 
now  occupied,  or  not  now  in  condition  for  occupation, 
and  all  the  capital  used  for  operating  the  same,  shall 
be  exempt  from  taxation  for  the  term  of  five  years 
from  the  time  of  commencing  to  operate  the  same, 
where  the  amount  of  capital  actually  invested  shall 
not  be  less  than  $1000 ; but  all  property  so  exempted  I 
shall  be  appraised  by  the  listers  each  year,  and  its  val- 
uation shall  be  stated  upon  the  grand  list,  and  the 
exemption  from  taxation,  and  the  time  when  such  ex- 
emption will  terminate,  shall  be  noted  against  it. 

“ Seo.  2.  This  act  shall  take  effect  from  its  passage. 

M Approved  November  22,  1870.” 

B 


the  foreign  commerce  of  the  country,  the  State 
itself,  far  more  than  any  other,  is  brought  di- 
rectly in  contact  with  foreign  countries  and  with 
their  systems  of  taxation  ; so  far  especially  as 
these  latter  affect  the  cost  and  movement  of  mon- 
ey capital,  the  development  of  shipping,  manu- 
facturing and  mining,  and  the  cost  of  storage 
and  distribution  of  merchandise.  And  in  re- 
viewing the  respective  systems,  we  find  that 
there  is,  upon  the  one  side,  as  nearly  perfect 
freedom  from  iuquisition  and  restriction  as  the 
wants  of  local  government  and  society  will  per- 
mit ; and  on  the  other  as  cumbersome,  vexa- 
tious, and  ineffective  a system  as  accident  or  the 
force  of  circumstances  could  well  originate. 

Thus,  for  example,  in  Great  Britain,  France, 
Belgium,  Prussia,  and  Holland,  there  are  no  di- 
rect taxes  on  personal  property ; and  in  all  of 
these  countries  special  care  is  taken  that  the  in- 
cidence of  local  taxation  shall  not  increase  the 
cost  of  production,  especially  of  manufacturing, 
or  of  the  commercial  transactions  involved  in 
the  movements  of  the  finished  products  of  in- 
dustry to  a market ; but,  in  New  York,  in  com- 
mon with  all  the  other  States,  except  Pennsyl- 
vania, it  has  thus  far  been  considered  desirable 
rather  than  otherwise  to  impose  upon  the  cap- 
ital especially  employed  in  manufacturing  as 
large  a proportion  of  the  burden  of  local  tax- 
ation as  practicable.  It  is,  therefore,  evident 
that,  to  the  extent  of  this  difference  in  the  in- 
cidence of  taxation,  the  manufacturers  in  New 
York  must  enter  a foreign  market  at  a disad- 
vantage, for  which  there  can  be  no  direct  com- 
pensation ; while  as  regards  his  own,  or  the 
home  market,  he  has  need  of  a corresponding 
measure  of  protection,  either  in  the  way  of  in- 
creased expenses  of  transportation  or  a rate  of 
tariff,  in  order  to  hold  his  own  against  his  more 
favored  foreign  competitor.  How  this  condition 
of  inequality  operates  as  a bar  to  State  and  na- 
tional progress  conjointly  may  be  practically 
shown  by  various  examples. 

Let  us  suppose  the  projection  of  a new  line 
of  steamships  to  run  between  the  city  of  New 
York  and  Europe  in  competition  with  existing 
lines,  now  controlled  by  foreign  capitalists  and 
registered  under  a foreign  flag.  If  the  nation- 
ality of  the  company  is  to  be  American,  and  its 
location  New  York  city,  the  State,  city,  and  coun- 
ty W'ould  have  levied,  or  have  authorized  the 
levying,  during  the  past  year,  on  the  whole  ac- 
cessible capital  or  property  of  the  company,  in 
the  form  of  vessels,  wharves,  store-houses,  ma- 
chine shops,  offices,  and  floating  capital,  a tax 
of  2.27  per  cent. 

Beyond  this,  the  national  government  would 
have  imposed  an  average  tax  under  the  tariff, 
on  all  articles  of  foreign  growth  or  importation 
used  in  the  vessels  of  the  line,  of  forty-eight  per 
cent. ; on  the  profits  or  dividends  of  the  compa- 
ny (if  perchance  there  should  be  any),  an  in- 
come tax  ; on  all  tickets  for  passage,  a tax  va- 
rying from  fifty  cents  to  one  dollar  and  a half ; 
and  until  quite  recently  would  have  also  taken 
two  and  one-half  per  cent,  on  gross  receipts  from 


18 


LOCAL  TAXATION. 


both  passengers  and  freights.  If,  on  the  other 
hand,  the  situs  of  the  company  is  made  foreign, 
and  its  location  fixed  at  Liverpool,  the  whole 
amount  of  local  taxation  to  which  the  company 
would  have  been  subjected  would  be  merely  an 
assessment  to  the  extent  of  from  ten  to  twenty- 
five  per  cent,  on  the  rental  value  of  the  premises 
occupied  either  as  offices,  store-houses,  or  ma- 
chine-shops. Beyond  this  the  British  govern- 
ment would  have  levied,  in  the  year  1870,  an  in- 
come tax  on  the  profit  of  the  individual  stock- 
holders or  owners,  of  four  pence  on  the  pound 
sterling,  equivalent  to  one  and  two-thirds  per 
cent.,  and,  omitting  all  other  forms  of  direct  tax- 
ation, would  have  allowed  all  articles  subject  to 
taxation  either  under  the  excise  or  tariff,  such 
as  distilled  spirits,  teas,  sugars,  coffee,  wines,  and 
tobacco,  which  may  be  required  for  use  on  board 
the  steamer  in  question,  to  be  taken  from  bond 
free  of  duty.  The  difference  in  the  return  on 
the  investment,  therefore,  growing  out  of  the 
difference  merely  in  the  fiscal  systems  recog- 
nized in  the  different  locations  specified,  would 
be  of  itself  sufficient  to  afford  to  the  foreign 
capitalist  a dividend  on  his  stock  nearly  or  quite 
equal  to  the  ordinary  rate  of  European  interest 
on  the  capital  employed ; while  to  the  American 
investor  the  disadvantage  would  have  an  ex- 
pression at  least  twofold  greater  through  an  in- 
crease of  expenses  and  a diminution  of  profit 
which  can  be  traced  directly  to  a system  of  tax- 
ation and  currency  which  has  enhanced  the 
price  of  every  thing  that  has  entered  into  the 
steamer,  from  the  laying  of  her  keel  to  the  coal 
that  feeds  her  engines.  With  competition, 
therefore,  with  foreign  nations,  on  terms  of 
equality,  being  thus  from  the  very  outset  by 
our  own  acts  rendered  impossible,  it  is.  not  to  be 
wondered  that  no  American  steamship  sails  to- 
day from  the  port  of  New  York  on  any  trans- 
atlantic voyage,  and  that  there  is  not  now  in 
any  commercial  city  of  the  United  States  hard- 
ly a single  forge  fire  alight  which  could  at  once 
weld  and  fashion  a shaft  adequate  for  the  neces- 
sities of  a first-class  ocean  steamer.  It  is  also 
interesting  to  note  that  during  the  present  year 
the  Legislature  of  Pennsylvania  has  incorpora- 
ted a transatlantic  steamship  company,  having 
its  American  situs  in  Philadelphia,  in  which  all 
the  property  of  the  company,  stock  and  bonds 
included,  is  specifically  exempted  from  all  tax- 
ation. 

If  we  select  another  example,  the  manufac- 
ture of  cotton  in  Great  Britain  and  New  York 
respectively,  we  find  that  in  the  former  country 
the  incidence  of  all  local  or  other  direct  taxa- 
tion extends  only  to  the  rental  value  of  the 
buildings  used  for  the  reception  of  machinery  or 
the  transaction  of  other  details  of  the  business 
of  manufacturing,  and  does  not  in  any  way  re- 
gard the  value  of  the  machinery  which  may  be 
placed  in  such  buildings,  or  the  capital  employed 
in  its  workings.  On  the  other  hand,  in  New 
York  in  common  with  all  the  other  States,  ex- 
cept Pennsylvania,  the  incidence  of  local  taxa- 
tion falls  upon  every  thing  connected  with  the 


business  of  cotton  manufacture  that  is  accessi- 
ble, viz.,  buildings,  land,  capital,  and  machinery, 
and  is,  moreover,  not  unfrequently  duplicated ; 
the  land,  machinery,  and  buildings  being  taxed 
to  the  company  or  corporation  at  the  place 
where  they  are  situated,  and  the  stock  to  the 
stockholders  at  the  place  of  his  residence  or 
domicile. 

In  one  instance  (and  that  not  exceptional) 
brought  to  the  notice  of  the  commissioners,  the 
aggregate  of  these  local  taxes  imposed  on  a par- 
ticular corporation  located  in  one  of  the  New 
England  States,  amounted,  in  1868,  to  over four 
per  cent,  upon  the  whole  capital  invested,  and 
in  years  previous  the  aggregate  was  reported  as 
considerably  in  excess  of  this  figure. 

But  vicious  as  this  system  is,  upon  its  face, 
its  effects,  contrasting  our  domestic  with  foreign 
systems  of  taxation,  can  not  be  fully  appreciated 
until  we  take  into  consideration  the  fact  that 
the  capital  required  to  build  a cotton  or  woollen 
mill  in  the  United  States  is  about  double  the 
amount  required  in  Great  Britain,  or  upon  the 
continent  of  Europe.  Four  per  cent. , therefore, 
on  the  capital  of  a cotton-mill  in  the  United 
States  represents  eight  per  cent,  on  the  same 
productive  power  in  Great  Britian,  Belgium,  or 
Germany;  a rate  which  is  almost  double  the 
average  rate  of  interest  in  the  latter  countries. 
It  is,  therefore,  clear  that  the  manufacturers  of 
the  State  of  New  York  engaged  in  cotton,  wool- 
len, or  other  industries  similarly  affected,  are 
now  so  burdened  by  the  acts  of  their  own  do- 
mestic legislation,  that  they  absolutely  need 
some  measure  of  compensation,  freight,  or  tariff 
protection,  in  respect  to  this  one  item,  to  ena- 
ble them  to  compete  successfully  in  their  own 
markets  against  foreign  competitors ; and  if 
the  neighboring  States  were  to  adopt  the  sys- 
tem of  local  taxation  existing  in  Pennsylvania, 
or  a more  liberal  one,  and  New  York  were  to 
adhere  to  her  present  system,  manufacturing  in- 
dustry, to  a very  great  extent,  would  either  be 
obliged  to  abandon  the  State,  or  force  a repeal 
of  the  existing  laws. 

IMPERFECTIONS  AND  ANOMALIES  OF  THE  EXIST- 
ING SYSTEMS  OF  LOCAL  TAXATION. 

But  apart  from  any  necessity  for  reform  in 
the  system  of  local  taxation  in  New  York,  grow- 
ing out  of  diversities  in  the  systems  adopted  by 
other  commercially  competitive  or  contiguous 
States,  which  may  be  remedied  by  compensa- 
ting legislation  ; and  apart  from  the  differences 
through  varying  debts  and  expenditures  in  the 
burden  of  annual  taxation  to  be  of  necessity  sus- 
tained, which  last  may,  in  a degree,  be  remedied 
by  more  economical  administration,  and  by  ad- 
justing the  load  to  be  carried  in  such  a way  as 
that  it  shall  fit  squarely  upon  the  back  of  the 
body  politic,  rather  than  paralyze  by  pressure 
on  the  neck,  or  suspension  from  the  extremi- 
ties ; there  is  a further  imperative  need  of  in- 
quiry and  reform  from  the  inequality  and  in- 
adequacy of  the  existing  system  to  accomplish 
the  work  assigned  to  it.  In  short,  it  needs  but 


LOCAL  TAXATION. 


19 


the  most  superficial  examination  of  the  prevail- 
ing system  of  local  taxation  in  the  State  of  New 
York  to  abundantly  satisfy,  that  whatever  it  is 
of  to-day,  it  has  grown  up  in  common  with  the 
tax  systems  of  all  the  other  States,  under  the 
pressure  of  necessity,  and  mainly  under  the  in- 
fluence of  accident  and  circumstance.  And  it 
does  not  appear  that  in  a single  instance  in 
which  previou-  ^.tempts  at  reform  in  State  taxa- 
tion have  been  made,  that  those  intrusted  with 
the  work  have  ever  proposed  to  themselves  any 
thing  more  than  to  amend  the  administration  of 
the  laws  imposing  taxation  as  they  found  them, 
and  to  include  a larger  number  of  items  than 
before  in  the  range  of  valuation  and  assess- 
ment ; and  that  no  inquiry  was  either  instituted 
or  contemplated  in  respect  to  the  influence  of 
local  taxation  on  the  cost  of  production,  on  the 
growth  and  development  of  the  State,  or  the 
equitable  distribution  of  the  annual  surplus  of 
production  over  consumption  among  the  masses. 

The  illustrations  which  may  be  given  in  sup- 
port of  these  positions  constitute  some  of  the 
most  curious  of  the  contributions  which  have 
ever  been  made  to  the  history  of  political  and 
social  economy.  The  exemption  of  bonds  and 
mortgages  on  real  estate  from  taxation  in  a ma- 
jority of  the  counties  in  the  State  of  Pennsyl- 
vania, and  the  retention  of  the  tax  upon  such 
instruments  in  others,  has  been  referred  to,  but 
the  history  of  the  origin  of  this  inequality  through 
what  may  be  termed  “accident ” is  yet  to  be  re- 
lated. It  is  reported  in  this  wise:  A single 
county  in  that  State,  a few  years  ago,  in  the  first 
instance,  finding  its  local  development  obstructed 
through  a deficiency  of  loanable  capital,  which 
deficiency  in  turn  was  occasioned  by  a taxation 
which  reduced  the  rate  of  interest  on  such  capi- 
tal when  lent  on  mortgages  below  what  could  be 
obtained  by  investment  in  other  securities,  peti- 
tioned the  Legislature  for  the  exemption  of  mort- 
gages, executed  within  the  county  limits,  from 
all  taxation.  The  petition  being  acceded  to, 
other  counties,  through  their  representatives, 
were,  on  motion,  included  in  the  privilege ; and 
as  the  bill  finally  passed,  all  the  counties  at  that 
time  seeking  exemption  were  allowed  it,  while 
in  respect  to  those  which  either  did  not  express 
an  opinion  on  the  subject,  or  did  not  favor  ex- 
emption, the  taxation  remained  as  before ; and 
thus  the  present  general  rule  of  administration 
in  Pennsylvania,  in  place  of  being  the  result  of 
a general  law,  became  the  exception  on  the  stat- 
ute-book. 

Again,  there  would  seem  to  be  no  more  fun- 
damental principle  in  the  adjustment  and  assess- 
ment of  taxes  in  respect  to  one  and  the  same 
State  or  community,  than  that  the  law  or  tax, 
whatever  it  may  be,  shall  be  uniform  in  its  ap- 
plication to  all ; a principle  confirmed  in  the 
first  article  of  the  eighth  section  of  the  Constitu- 
tion of  the  United  States;  the  one  conferring 
power  on  Congress  to  “lay  and  collect”  taxes, 
which  expressly  provides  “ that  all  duties,  im- 
posts, and  excises  shall  be  uniform  throughout 
the  United  States.”  In  short,  except  where 


arbitrary  powers  have  been  exercised  by  despotic 
or  half-civilized  rulers,  it  would  be  difficult  to 
find  exceptions  to  this  rule  in  the  history  of  other 
countries;  and  yet,  in  our  own  country,  we  have 
more  than  one  illustration  and  evidence  to  the 
contrary.  In  the  case  derived  from  the  laws  of 
Pennsylvania,  just  referred  to,  the  occurrence 
was  evidently  the  result  of  accident  and  circum- 
stance rather  than  of  design  ; but  in  the  case  of 
New  Jersey,  which,  within  the  last  two  years, 
has  not  only  singled  out  certain  counties,  but 
even  particularized  certain  cities  and  towns  for 
exemption  from  a taxation  made  applicable  to 
all  the  rest  of  the  State,  the  design  of  the  result- 
ing inequality  is  not  only  apparent  but  admit- 
ted. 

Again,  an  inconsistency  in  relation  to  assess- 
ments for  taxation  exists  in  the  laws  of  New 
York,  for  which  it  would  be  difficult  to  find  a 
counterpart  in  the  legislation  of  any  other  State 
or  country.  Thus,  while  the  general  law  of  the 
State  requires  that  personal  property,  in  the  na- 
ture of  mortgages,  debts,  money  at  interest, 
choses  in  action,  etc.,  shall  be  held  to  follow  per- 
sonal residence,  a specific  law*  enacted  with  a 
view  of  reaching  certain  foreign  proprietors,  pro- 
vides for  exactly  the  reverse  practice  in  respect 
to  notes  and  mortgages  executed  within  the  State 
and  held  by  foreigners. 

An  act  of  the  Legislature  of  Illinois,  passed 
April  16,  1869,  is  also  especially  worthy  of  no- 
tice in  any  review  of  the  anomalies  and  incon- 
sistencies of  American  taxation.  This  act  pro- 
vided that  whenever  any  county,  incorporated 
city  or  town,  shall  have  created  a debt  ta  aid 
in  the  construction  of  any  railway,  it  shall  be 
the  duty  of  the  State  Treasurer  to  place  to  the 
credit  of  such  county,  town,  etc.,  all  the  State 
taxes  received  from  such  county,  township, 
etc.,  derived  from  the  increased  valuation  of 
property  over  and  above  the  valuation  for  the 
year  1868,  and  apply  the  same  to  the  payment 
of  the  bonded  railroad  debt  of  such  county, 
township,  etc.  Thus,  for  example,  if  the  valu- 
ation of  property  in  a given  county  or  town, 
in  1868,  was  $1,000,000,  and  in  the  year  1870 
$1,500,000,  then  the  law  prescribes  that  all  State 
taxes  collected  upon  the  additional  $500,000 
shall  be  returned  to  the  locality  to  pay  its  rail- 
road indebtedness.  On  the  other  hand,  those 
localities  which  are  not  so  fortunate  as  to  have 
railroad  debts  will  meanwhile  continue  to  pay, 
in  common  with  the  rest  of  the  State,  on  their 
increased  valuations ; but  the  payments  thus 
made  will  be  used  to  defray  the  general  ex- 
penses of  the  State  government,  and  not  for  the 
exclusive  benefit  of  those  on  whom  the  tax  is 
levied  ; an  arrangement  which,  in  fact,  makes 
prudence  and  economy  or  a deprivation  of  rail- 
road accommodations  an  occasion  for  dispropor- 

* “All  debts  owing  by  inhabitants  of  this  State  to 
persons  not  residing  within  the  United  States  for  the 
purchase  of  any  real  estate,  shall  be  deemed  personal 
property,  within  the  town  or  county  where  the  debtor 
resides,  and  as  such  shall  be  liable  to  taxation  in  the 
I same  manner  and  to  the  same  extent  as  the  personal 
estate  of  citizens  of  this  State.”— Laws  1851,  ch.  3T1. 


20 


LOCAL  TAXATION. 


tionate  taxation,  and  offers  a bounty  for  the  in- 
curring of  indebtedness. 

IRREGULARITIES  IN  METHODS  OF  VALUATION. 

Coming  next  to  the  consideration  of  the  rules 
adopted  for  the  valuation  of  property,  both  real 
and  personal,  for  taxation,  the  irregularities 
generally — Massachusetts  and  the  city  of  Phil- 
adelphia possibly  excepted — will  be  found  to  be 
so  great  and  so  extreme  that  the  word  chaotic  is 
the  only  term  that  can  properly  be  used  to  char- 
acterize the  systems  or  the  practice. 

As  has  already  been  stated,  the  valuation  of 
the  property  of  the  State  of  New  York  for  taxa- 
tion increased, from  1860  to  1869  inclusive,  from 
$1,419,297,520  to  $1,860,120,770,  or  at  the  rate 
in  ten  years  of  about  thirty-one  per  cent.  In 
Massachusetts,  the  valuation  increased  during 
the  same  period  forty-eight  per  cent.  ; in  Con- 
necticut, 30.5  per  cent.  ; in  Rhode  Island,  from 
1861  to  1868,  54.9  ; while  in  New  Jersey  the  val- 
uation increased  thirteen  per  cent,  in  the  three 
years  from  1866  to  1869,  inclusive.  It  is  thus  ev- 
ident in  the  outset  that  unless  we  suppose  New 
York  to  have  increased  in  wealth  and  population 
at  a less  rapid  ratio  than  the  States  which  are 
contiguous  to  her,  an  assumption  which  can 
not  be  admitted,  the  existing  valuation  of  the 
State  is  comparatively  incorrect  and  erroneous. 

VALUATION  OF  REAL  ESTATE. 

In  New  York  the  State  tax  is  apportioned 
among  the  counties  on  the  basis  of  their  respect- 
ive valuations  of  real  estate,  and  the  same  rule 
prevails  among  the  towns  of  the  different  coun- 
ties. Hence  arises  the  double  competition  be- 
tween the  assessors  of  counties  in  the  aggregate, 
and  of  the  towns  in  each  county,  for  the  lowest 
possible  valuation.  Having  completed  his  of- 
ficial labors,  each  assessor  in  the  State  sub- 
scribes an  oath  of  which  the  following  is  the 
material  portion : 

“We  do  severally  depose  and  swear  that  we 
have  set  down  in  the,  foregoing  assessment-roll 

all  the  real  estate  in , according  to  our  best 

information,  * * * and  that  we  have  estimated 
the  value  of  said  real  estate  at  the  sums  which 
a majority  of  the  assessors  have  decided  to  be 
the  full  and  true  value  thereof  and  at  which 
they  would  appraise  the  same  in  payment  cf  a 
just  debt  due  from  a solvent  debtor .” 

And  the  law  further  provides  “ that  every 
assessor  who  shall  willfully  swear  false  in  tak- 
ing and  subscribing  said  oath,  shall  be  guilty  of 
and  liable  to  the  penalties  of  willful  and  cor- 
rupt perjury.”  Let  us  now  see  what  are  the 
acknowledged  facts  in  respect  to  the  valuation 
of  real  property  in  New  York,  and  some  of  the 
other  States,  where  a substantially  like  oath  is 
made  imperative. 

In  some  instances  in  New  York  the  valuation 
of  real  estate  for  taxation  is  reported  as  low  as 
twenty  per  cent,  of  its  real  value.  In  a majori- 
ty of  cases  in  the  country  the  rate  varies  from 
twenty-five  to  thirty-five  per  cent.,  and  rises  in 
the  cities  to  fifty  and  possibly  sixty  per  cent,  as 


a maximum.  In  short,  there  can  not  probably 
be  found  a single  instance  in  the  whole  State, 
unless  possibly  in  the  case  of  certain  unoccu- 
pied lands,  the  property  of  non-residents,  where 
the  law  as  respects  the  valuation  of  real  prop- 
erty is  fully  complied  with,  and  where  the  oaths 
of  the  assessors  are  not  wholly  inconsistent  with 
the  exact  truth.* 

Of  numerous  examples  of  irregularity  or  in- 
adequacy of  assessment  brought  to  the  attention 
of  the  commissioners,  the  following  may  serve 
as  illustrations  : 

In  1842  the  real  estate  of  Oneida  county 
was  assessed  at  $9,935,209;  and  in  1869  at 
$14,581,949,  showing  an  increase  in  value  in 
twenty-seven  years  of  only  $4,656,740.  In 
1865  the  value  of  live  stock  in  Oneida  coun- 
ty, as  returned  in  the  census  of  the  State,  was 
$4,254,587.50,  and  the  value  of  the  farms  $26,- 
944,185,  making  a total  value  of  farms  and  live 
stock  of  $31,198,772 ; and  in  1865  there  was 
in  Oneida  county  $3,542,925  capital  invested 
in  cotton,  woollen,  paper,  grist  and  flouring  and 
lumber  mills,  and  in  tanneries  and  iron-furnaces. 

Oneida  county  has  735,453  acres  of  land,  the 
average  assessed  value  of  which  is  only  about 
twenty  dollars  per  acre,  and  this  valuation  in- 
cludes the  real  estate  of  the  cities  of  Utica, 
Rome,  etc.  The  value  of  the  dwellings  alone 
in  Oneida  county,  in  1865,  according  to  the 
census  of  New  York,  was  $14,589,715,  being 
more  than  the  assessed  value  of  all  the  real  es- 
tate of  the  county  in  1869. 

Westchester  county  has  278,827  acres  of  land, 
the  assessed  valuation  of  which,  with  buildings, 
etc.,  in  1869,  was  $45,602,201,  or  at  the  rate 
of  $163  per  acre.  The  opinion  of  an  expert  in 
such  matters,  however,  is,  that  any  valuation  of 
the  real  estate  of  this  county  less  than  $150,- 
000,000  would  be  low;  the  county,  as  is  well 
known,  being  bounded  in  part  fiy  the  waters  of 
the  Hudson  and  the  Sound,  and  traversed  by 
the  Hudson  River,  Harlem,  and  New  Haven  rail- 
roads, and  containing  many  towns  and  villages 
in  which  real  estate  commands  several  thou- 
sands of  dollars  per  acre ; or  even  by  the  lot. 
According  to  the  census  of  1865,  the  value  of 


* “I  hold  that  under  our  present  system  there  is  no 
greater  manufactory  of  perjury  on  the  face  of  the 
earth.  What  is  the  habit  throughout  the  entire  length 
and  breadth  of  the  State  of  New  York?  Towns  are 
fighting  towns,  through  their  assessors,  to  get  at  the 
lowest  possible  point  the  assessment  of  their  real  and 
personal  property,  for  the  purpose  of  going  up  to  the 
board  of  supervisors,  and  in  the  taxation  of  the  county 
charges,  to  have  their  particular  towns  as  low  as  pos- 
sible in  the  roll  of  taxation.  That  engenders  a neces- 
sity on  the  part  of  counties  to  act  in  the  same  way; 
and  you  find  the  counties  cutting  down  their  assess- 
ment-rolls in  the  equalization  of  valuation  of  their 
property  as  low  as  possible,  so  that  when  they  come 
up  here  to  Albany  and  appear  before  the  State  equali- 
zation board,  to  divide  the  State  taxation,  they  shall 
pay  the  least  amount  of  tax  they  possibly  can.  There 
is  no  attempt  on  the  part  of  the  assessors  and  super- 
visors to  get  at  the  honest,  actual  value  of  the  property 
of  the  country,  but  there  is  an  attempt  to  get  it  at  as 
low  a point  as  possible,  in  order  to  get  an  advantage 
over  neighboring  towns  and  counties  in  the  operation 
of  dividing  the  taxes  of  the  county  and  State.”— Speech 
of  Hon.  Thomas  G.  Alvord , Debates  New  York  Consti- 
tutional Convention,  1S67-CS  ; vol.  iii.,  p.  1905. 


LOCAL  TAXATION. 


21 


the  dwellings  alone  in  Westchester  county  was 
returned  at  $36,755,440,  and  the  value  of  the 
farms  at  $37,587,333. 

In  1858,  the  valuation  of  the  real  estate  of 
Dutchess  county , one  of  the  richest  agricultural 
counties  of  the  State,  was  $21,169,721,  and  in 

1869,  $20,927,018,  thus  showing  a decrease  in 
eleven  years  of  $242,703.  Dutchess  county  has 
486,837  acres  of  land,  assessed  for  taxes  within 
a fraction  of  forty -three  dollars  an  acre,  and 
this  includes  Poughkeepsie,  Fishkill,  Rhine- 
beck,  etc.,  where  real  estate  is  sold  for  thou- 
sands of  dollars  per  acre.  The  census  cash  value 
of  the  farms  in  this  county,  in  1865,  was  $30,- 
342,547,  the  cash  value  of  the  dwellings  $13,- 
845,635,  making  a total  of  $44,188,182. 

In  Erie  county  the  valuation  of  real  estate  in 
1852  was  $31,964,856  ; and  in  1858,  $43,249,- 
639  ; showing  an  increase  in  six  years  of  $11,- 
284,783.  In  1870  the  valuation  of  real  estate 
is  returned  at  $43,392,351  ; showing  an  in- 
crease in  twelve  years  of  only  $142,712.  Ac- 
cording to  the  State  census  of  1865,  the  value 
of  farms  in  Erie  county  was  $25,314,744,  and 
number  of  acres  or  improved  land  in  the  county 
407,302.  Value  of  the  dwellings  in  the  towns, 
$5,695,386 ; value  of  the  dwellings  in  the  city  of 
Buffalo,  $28,918,891.  The  value  of  the  dwell- 
ings in  the  city  of  Buffalo,  in  the  census  return 
of  1865,  was  only  $1,985,244  less  than  the  as- 
sessed value  of  all  the  real  estate  of  the  city  in 

1870. 

In  Monroe  county,  one  of  the  richest  and  most 
populous  counties  of  the  State,  the  valuation  of 
the  real  estate  in  1858  was  $24,367,165  ; and  in 
1869,  $23,066,624  ; thus  showing  a decrease  in 
eleven  years  of  $1,300,541.  The  value  of  the 
farms  of  this  county,  by  the  census  of  1865,  was 
returned  at  $20,415,992,  or  at  an  average  of 
about  $77  per  acre.  The  value  of  the  buildings 
of  the  county,  outside  of  the  city  of  Rochester, 
was  returned  in  1865  at  $6,830,967,  and  of  the 
city  itself  at  $15,861,760;  making  a total  of 
$22,692,727,  or  only  $368,897  less  than  the 
entire  value  of  the  real  estate  of  the  county,  in- 
cluding the  city  of  Rochester. 

Similar  illustrations  might  be  obtained  from 
the  valuation  and  census  statistics  of  many  of  the 
other  counties  of  the  State ; but  the  above  are  be- 
lieved to  be  sufficient  to  show  the  nature  of  the 
valuations  of  real  estate  which  at  present  char- 
acterize the  existing  tax  system  of  the  State  of 
New  York.*  But  that  this  state  of  affairs  is 


* The  following  extracts  from  statements  made  by- 
delegates  from  various  parts  of  the  State  to  the  con- 
stitutional convention  of  1867-68,  when  the  subjects 
of  valuation  and  assessments  were  under  considera- 
tion, will  also  serve  as  further  illustrations  of  the  im- 
perfections and  inequalities  of  the  existing  system : 

“The  gentleman  has  said  that  the  present  law  is 
abundantly  sufficient.  I ask  him  to  point  me  to  a sin- 
gle board  of  assessment  anywhere  in  this  State  -who 
begin  to  live  anywhere  near  to  the  requirement  of 
law.  They  can  ^ do  it.  It  is  an  impossibility  for 
them  to  do  it.  The^  . 'u  only  estimate  the  value  of 
the  property  arbitrarily,  putting  it  as  high  as  they 
please,  and  then  leave  it  to  individuals  themselves  to 
come  forward  and  modify  it ; but  rather  than  subject 
themselves  to  that  mode  of  correcting  these  assess- 
ments, they  go  through  the  State,  putting  property 


not  peculiar  to  New  York,  is  made  evident  by  the 
following  extract  of  a letter  written  to  the  com- 
missioners by  an  official  of  a neighboring  State. 

“The  practice  on  the  part  of  assessors  in 
nearly  every  town  in  the  State,  has  been  to 
make  oath  that  the  real  estate  has  been  ap- 


down  to  the  lowest  possible  point  that  their  con- 
sciences will  permit  (in  order  that  they  may  not  be 
worried  by  the  importunities  of  parties  to  reduce  tax- 
ation), which  they  are  generally  obliged  to  do  upon 
the  representations  of  the  parties,  since  their  own  es- 
timate is  but  an  arbitrary  guess.” — T.  G.  Alvord , 22 d 
District,  Debates  Constitutional  Convention , vol.  iii.,  p. 
2311.  “I  am  well  aware  that  our  system  of  taxation 
is  a gigantic  fraud  in  the  great  commercial  city  of 
New  York,  and  that  many  of  our  largest  property- 
holders  know  that  every  year,  in  the  strict  eye  of  the 
law,  they  are  actually  in  complicity  with  fraud  on  the 
part  of  assessors  and  collectors  in  that  city.”— A.  J.  U. 
Duganne,  New  York  city , Delegate  at  Large , Ibid.,  vol.  iii. , 
p.  2314.  “In  1S59  there  was  a law  passed  by  the  Leg- 
islature of  this  State,  which  authorized  any  town  in 
any  county  which  conceived  itself  to  be  aggrieved  by 
the  equalization  of  their  board  of  supervisors,  to  car- 
ry their  case  to  the  Comptroller.  Under  that  law  but 
one  case  has  arisen  in  this  State,  and  that  arose  this 
year,  in  the  county  of  Jefferson.  The  town  conceived 
itself  to  be  aggrieved  by  the  equalization ; and  the 
Comptroller  referred  the  matter  to  an  individual  re- 
siding in  that  county.  He  did  the  work  effectually. 
He  placed  in  oue  column  the  actual  cost  value  of  the 
real  estate  of  every  town  in  that  county,  and  the  value 
at  -which,  as  estimated,  it  was  sold  from  day  to  day. 
In  the  other  column  he  placed  the  assessed  value  of 
the  property  of  each  town  in  that  county.  The  lowest 
rate  of  assessment  was  at  twenty-two  and  one-half  per 
cent. ; the  highest  ivas  forty-five  per  cent. ; the  average 
was  thirty-three  and  one-third  per  cent.  The  assess- 
ment was  not  correct,  and  the  town  was  relieved.  It 
was  shown  that  the  board  of  equalization,  in  making 
up  its  account,  had  taxed  the  town  at  forty-five  per  cent., 
ivhereas  they  had  put  part  of  the  county  as  low  as  twen- 
ty-two per  cent.  There  is  a county  in  this  State,  in  the 
vicinity  of  the  county  in  which  I live,  which,  in  point 
of  population,  in  geographical  area,  is  larger  than  the 
county  from  which  I am,  which  has  added  within  the 
last  ten  days  to  its  return  of  assessments  about  elev 
en  millions  of  dollars  by  the  board  of  equalizers ; and 
yet  it  now  stands  almost  one-third  less  in  valuation 
than  my  county,  Every  one  who  knows  the  situation 
of  those  two  counties  knows  that  the  one  which  is 
larger  in  point  of  population  and  larger  in  area  has 
vastly  more  wealth  than  my  county."—!7.  G.  Alvord, 
Ibid.,  vol.  iii.,  p.  2321.  “I  know  the  fact  that  real  estate 
is  assessed  unequally.  In  some  localities  it  will  not 
exceed  one-fifeh  of  its  value,  and  in  others  one-third ; 
others,  one-half  to  two-thirds.”— .4.  F.  Allen,  Delegate 
32 d District,  vol.  iii.,  p.  1901.  “I  had  supposed  the 
present  law  required  that  all  property  be  assessed  its 
actual  value  ; but  the  practice  is  much  worse  than  the 
principle.  The  practice,  so  far  as  I understand  it,  is 
to  assess  real  estate  at  about  one-third  of  its  value, 
and  to  assess  personal  property,  so  far  as  it  can  be  dis- 
covered, at  nearly  its  full  value ; so  that  really  the  hon- 
est man  is  oppressed,  while  the  ingenious  rogue  goes 
scot  free.” — Jas.  A.  Bell,  Delegate  from  the  18 th  Dis- 
trict, Chairman  of  Joint  Committee  of  Legislature,  1S62- 
’3,  on  Revision  of  Tax  Laios;  Debates  Constitutional  Con- 
vention, vol.  iii.,  p.  1909.  “ I believe  that  it  is  difficult 
to  conceive  of  a system  of  distributing  the  burdens  of 
a civilized  community  so  that  it  would  operate  more 
gross  injustice  than  the  actual  system  of  taxation  as 
ft  now  exists  among  us.  This  system  is  not  only 
grossly  unjust,  but  it  is  demoralizing  to  the  last  de- 
gree. Your  assessor  takes  up  the  assessment-books 
with  the  perfect  consciousness  that,  do  what  he  will, 
his  neighbor  who  owns  land  is  to  be  robbed.  His 
neighbor  knows  that,  and  the  consequence  is,  that  the 
assessment  of  real  estate  never  tells  the  truth.  Real 
estate  is  never  assessed  truthfully,  and  thus  a general 
demoralization  ensues.  I insist  that  a people  cau  not 
prosper  whose  officers  either  work  or  tell  lies.  There 
is  not  an  assessment-roll  now  made  out  in  the  State 
that  does  not  both  tell  and  work  lies.”— M.  I.  Town- 
send, Delegate  at  Large,  Troy,  N.  Y.,  Ibid.,  vol.  iii.,  p. 
1945.  “It  is  undoubtedly  true  that  not  one -half— I 
think  I may  say  one-quarter — of  the  property,  real  and 
personal,  in  this  State,  is  reached  by  the  assessor.”— 
David  Rumsey,  Delegate  <f  21th  Senatorial  District, 
Ibid.,  vol.  iii.,  p.  1947. 


22 


LOCAL  TAXATION. 


praised  by  them  ‘ at  such  sums  as  they  would 
appraise  the  same  in  payment  of  a just  debt  due 
from  a solvent  debtor while  current  sales  show- 
ed that  land  was  seldom  actually  appraised  above 
one-third  of  its  value.  This  being  the  case  with 
real  estate,  which  was  appraised  only  once  in  five 
years,  the  practice  was  in  many  towns  to  do  the 
same  by  personal  property,  and  only  put  on  one- 
third  of  that,  while  other  towns  put  it  on  at 
least  one-half,  and  others  at  full  value.  Then 
again  the  valuation  in  real  estate  caused  indi- 
viduals to  ‘ take  care  of  themselves  ’ by  secret- 
ing or  holding  back  from  the  listing  the  larger 
share  of  their  personal  estate.  Our  laws,  too, 
allow  offset  against  personal  property  (not 
against  real  estate),  and  practically  we  found 
people  heavily  in  debt  at  the  time  the  assessors 
made  their  appearance  — all  this  evasion  and 
fraud  to  avoid  paying  too  much  State  and  coun- 

ty  taxation.  I was  one  of  the  assessors  in  

this  year,  and  assisted  in  appraising  the  real  es- 
tate, and  the  footings  were  over  five  and  a half 
times  as  large  as  they  were  five  years  ago.  The 
appraisal  was  equalized  with  fifteen  towns  in  this 
county  by  another  county  board,  and  they  re- 
duced the  appraisal  to  less  than  two  millions. 
Then  a State  board  averaged  the  counties  of  the 
State,  and  raised  this  county  fifty  per  cent.,  and 
that  leaves  our  real  estate  standing  out  between 
fifty-one  and  fifty-two  per  cent,  of  its  selling  val- 
ue. Careful  examination  of  appraisals  and  of  rec- 
ords of  transfers  show  that  some  towns  making 
the  same  oath  we  made  had  only  put  their  lands 
in  at  thirty-one  and  one-fourth  of  its  current  sell- 
ing value.  Even  under  this  outrageous  practice 
our  Legislature,  which  has  just  adjourned,  could 
not  be  induced  to  pass  any  listing  law.” 

VALUATION  OP  PERSONAL  PROPERTY. 

But  great  as  may  be  the  inequalities  in  the  valu- 
ation and  assessment  of  real  property,  those  which 
obtain  in  respect  to  personal  are  so  much  greater, 
as  to  almost  preclude  the  idea  of  comparison. 

A careful  consideration  and  study  of  the  na- 
ture and  classification  of  property  inclines  the 
commissioners  to  indorse  the  correctness  of  an 
opinion  which  appears  to  have  been  originally 
proposed  by  a financial  writer  of  New  York,*  as 

* “ The  statistics  presented  by  assessments  of  prop- 
erty for  the  purposes  of  taxation  invariably  exhibit 
the  estimated  value  of  land,  and  its  meliorations  un- 
der the  head  of  ‘real  estate,’  and  the  estimated  value 
of  all  other  productive  capital  under  the  head  of  ‘per- 
sonal estate.’  Assessments  made  with  the  view  of 
obtaining  information  for  the  guidance  of  statesmen, 
or  for  historic  data,  usually  observe  the  same  rule  of 
classification.  Thus  divided,  we  may  readily  infer 
that  the  value  of  real  estate  greatly  exceeds  that  of 
personal  estate,  and  so  these  statistics  invariably  in- 
dicate. But  if  we  take  the  estimate  for  auy  given  vil- 
lage, town,  or  city,  and  from  the  gross  value  of  the  real 
estate  deduct  the  value  of  the  buildings,  and  add  it  to 
the  personal  estate,  we  shall  then  find  them  equal, 
provided  its  assessment  has  been  correctly  made, 
which,  by  the  way,  very  rarely  occurs.’’ 

“Now,  as  to  observation,  those  who  are  familiar 
with  the  value  of  property  in  the  city  of  New  York 
(any  other  city  would  serve  equally  well  as  an  illus- 
tration) are  aware  that  the  market  value  of  the  land 
on  which  it  is  built  is  much  greater  than  the  value  of 
the  buildings ; that  if  each  building-lot  and  each  build- 
ing in  the  city  should  be  separately  put  up  at  public 
sale,  and  sold  to  the  highest  bidders,  the  aggregate 


far  back  as  1851,  viz.  : “That  universally  the 
market  value  of  the  aggregate  of  land  and  that 
of  the  aggregate  of  productive  capital  are 
equal;”  and,  further,  that  in  highly  civilized 
and  densely  populated  States,  like  New  York, 
Massachusetts,  Rhode  Island,  etc.,  the  separate 
aggregates  of  property  generally  classed  under 
the  two  heads  of  “ real  ” and  “ personal,”  either 
equal,  or  closely  approximate  to  each  other  in 
actual  value.  In  the  light  of  this  theory,  let  us 
next  inquire  how  far  any  degree  of  conformity 
of  valuation  for  taxation  of  these  two  classes  of 
property  can  be  found  in  the  results  of  recent 
practice  and  experience.  The  following  table 
shows  the  separate  aggregate  valuations  of  real 
and  personal  property  for  assessment  and  taxa- 
tion in  the  States  of  New  York,  Massachusetts, 
Ohio, Iowa,  and  Illinois,  for  the  years  1869-70 
(under  a corresponding  system  of  assessment 
and  valuation),  together  with  the  ratio  of  the  re- 
spective valuations  in  question  : 


States. 

Valuation  of 
real  estate. 
1869. 

Valuation  of  per- 
sonal property. 
1869. 

Ratio  of  per- 
sonal to  real. 

New  York 

$1,532,720,907 

222,561,061 

346,587,734 

838,083,415 

697,418,203 

$434,270,278 
71,971,191 
142,407,041* 
503,085,988 
459,76i', 252 

1 to  3.50 

1 to  3.09 

1 to  2.43 

1 to  1.64 

1 to  1.51 

Illinois 

Massachusetts 

Ohio 

The  following  table  also  exhibits  the  separate 


price  of  the  lots  would  greatly  exceed  that  of  its 
buildings.  But  if  the  productive  capital  contained  in 
the  buildings  should  be  included  with  them,  then  the 
gross  price  of  the  two  would  be  about  equal.  This  is 
in  accordance  with  our  theory,  and  we  think  that  ob- 
servation strongly  supports  the  position,  if  it  does  not 
establish  its  soundness.  A striking  evidence  of  its 
truth  is  afforded  in  the  well-known  fact  that  each  lot 
will  bring  a price  corresponding  with  the  amount  of 
productive  capital  either  upon  it  or  in  its  immediate 
vicinity.  Take  Wall  Street,  for  example,  where  the 
buildings  are  most  costly  and  contain  most  of  produc- 
tive capital ; there  the  value  of  land  is  greatest.  Take 
a portion  of  the  city  above,  the  buildings  are  poor, 
and  the  locality  remote  from  the  productive  capital 
employed  in  commerce;  there  the  value  of  the  land 
is  least.  Here  it  should  be  remarked  that  buildings 
and  parts  of  buildings  designed  for  ornament  rather 
than  for  use  do  not  come  under  the  denomination  of 
productive  capital.  The  true  test  of  productive  value 
belonging  to  a house,  store,  or  other  building  is  the 
rent  it  will  command,  independent  of  the  ground-rent. 
It  is  to  be  observed,  also,  that  productive  capital  influ- 
ences the  market  value  of  land  beyond  the  immediate 
spot  on  which  it  is  placed.  For  this  reason  it  would 
be  necessary,  in  order  to  render  the  two  exactly  equal 
in  New  York,  or  any  other  city,  to  include  the  suburbs 
and  adjoining  lands  in  the  estimate.  Again,  little 
more  than  half  a century  has  elapsed  since  the  land 
on  which  the  city  of  Cincinnati  stands  was  purchased 
at  one  dollar  per  acre.  There  was  then  no  capital 
there ; now  there  are  many  millions  of  capital  there ; 
and  hence  we  now  find  the  market  value  of  the  land, 
exclusive  of  the  erections,  as  many  millions.  It  is 
thus  of  all  other  cities,  towns,  and  villages  throughout 
the  civilized  world ; and  it  is  thus  in  all  agricultural 
districts;  but  in  these  the  land  and  its  meliorations 
are  so  much  more  intimately  blended  that  we  can  not 
perceive  the  facts  so  readily!” 

“ The  truth  is,  the  market  value  of  land  is  merely  the 
reflection  of  the  value  of  the  productive  capital  placed 
upon  it  and  its  immediate  vicinity.  It  has  no  real  val- 
ue of  its  own  ; it  costs  nothing  to  produce  ; but  since 
the  laws  have  endowed  it  with  the  vital  principle  of 
wealth  by  subjecting  it  to  individual  ownership,  it  can 
no  longer  be  obtained  without  giving  in  exchange  for 
it  an  equivalent  portion  of  the  capital  present  and  de- 
signed to  concur  with  it  in  the  production  of  wealth.” 
— Treatise  on  Political  Economy,  George  Opdyke , page 
89-91 ; New  York,  1S51,  G.  P.  Putnam  & Co.  ” 

* Including  $16,2SO,9GO  assessed  under  tne  head  of 
railroad  property. 


LOCAL  TAXATION. 


23 


aggregate  valuations  of  real  and  personal  prop- 
erty in  several  of  the  cities  of  New  York  and 
of  other  States,  for  the  year  1869-70  (under  a 
corresponding  system  of  assessment  and  valua- 
tion), together  with  the  ratio  of  the  respective 
valuations  in  question : 


Cities. 

Valuation  of 
real  estate. 

Valuation  of  per- 
sonal property. 

Ratio  of  per- 
sonal to  real. 

Brooklyn,  N.  Y 

$183,689,579 

$17,559,980 

1 to 

10.46 

Rochester,  N.  Y 

9,725,736 

1,501,600 

1 to 

6.47 

Buffalo,  N.  Y 

30,904,139 

6,735,915 

1 to 

4.58 

Albany,  N.  Y 

25,144,980 

5,915,278 

1 to 

4.11 

Chicago,  111 

211,371,240 

54,683,655 

1 to 

3.86 

Springfield,  Mass 

17,665,610 

5,901,570 

1 to 

2.99 

Jersey  City,  N.  J.. . . 
New  York  city 

21,995,460 

8,735,610 

1 to 

2.51 

684,140,768 

281,142,696 

1 to 

2.42 

Worcester,  Mass 

21,608,800 

9,642,550 

1 to 

2.24 

Milwaukee,  Wis 

29,382,695 

14,110,618* 

1 to 

2.08 

Troy,  N.Y 

10,654,144 

5,366,965 

1 to 

1.98 

Lowell,  Mas9 

16,195,125 

8,595,871 

1 to 

1.88 

Boston,  Mass 

365,593,100 

218,496,300 

1 to 

1.67 

Cincinnati,  Ohio 

72,243,844 

58,471,666 

1 to 

1.23 

Providence,  R.  I 

50,908,400 

42,162,500 

*1  to 

1.20 

Attention  should  be  called  to  the  circum- 
stance that  cases  are  not  unfrequent  in  which 
the  valuation  of  the  personal  property  of  cer- 
tain towns  and  cities  for  taxation  is  in  excess 
of  the  valuation  of  the  real  property.  Thus, 
for  example,  in  the  city  of  Cincinnati,  in  1866, 
the  valuation  of  the  real  estate  was  $66,454,662, 
and  of  personal  property  $67,218,101;  but  it  is 
curious  to  note,  that  three  years  subsequently, 
or  in  1869,  when  the  tax  rate  had  advanced 
from  2.16  to  3.19,  the  valuation  of  personal 
property  shrunk  from  $67,218,101  to  $58,471,- 
166,  or  over  twelve  per  cent.  Again,  in  Mas- 
sachusetts, which  is  the  only  State  which  pub- 
lishes in  full  detail  its  valuations  and  assess- 
ments, the  valuations  for  1869-70  exhibit  the  fol- 
lowing cities  and  towns  as  possessing  an  aggre- 
gate of  personal  in  excess  of  real  property,  viz.: 
Salem,  Nahant,  Nantucket,  Brookline,  Brewster, 
Dennis,  Provincetown,  Wellfleet,  Yarmouth, 
Great  Barrington,  Stockbridge,  New  Bedford 
(in  the  proportion  of  14  to  8),  Hatfield,  Milton, 
and  others ; while  in  many  others  the  approxi- 
mation in  valuation  of  the  two  classes  of  prop- 
erty is  very  close. 

The  following  table  shows  the  comparative 
valuation  and  ratios  of  the  real  and  personal 
property  in  several  of  the  counties  of  New 
York,  as  shown  by  the  Comptroller’s  report  for 
1870: 


Counties. 

Valuation  of 
real  property. 

Valuation  of  per- 
sonal property. 

Ratio  of  real 
to  personal. 

Hamilton.:.*. 

$736,550 

$10,610 

1 to  l 

69.40 

Essex 

4,680,858 

450,490 

1 to 

10.39 

Schuyler 

3,194,515 

317,750 

1 to 

10.00 

St.  Lawrence 

14,946,943 

1,558,385 

1 to 

9.59 

Alleghany 

7,677,912 

860,121 

1 to 

8.92 

Monroe 

23,066,624 

2,739,692 

1 to 

8.67 

Schoharie 

4,654,969 

638,852 

1 to 

Cortland 

5,310,459 

753,909 

1 to 

7!o4 

Delaware 

7,365,319 

1,209,777 

1 to 

6.08 

'Westchester 

42,089,998 

7,838,654 

1 to 

5.37 

Albany 

.35,345,497 

7,669,879 

1 to 

4.60 

Ulster 

10,859,402 

2,498,953 

1 to 

4.34 

Washington 

11,906,632 

3,208,464 

1 to 

3.71 

Erie 

41,462,863 

11,431,680 

1 to 

3.62 

Rensselaer 

21,720,013 

7,796,515 

1 to 

2.91 

New  York 

684,140,768 

281,142,696 

1 to 

2.42 

In  Oneida  county  the  assessed  value  of  per- 


* Although  the  official  figures  indicate  an  approxi- 
mative equality  in  the  valuation  of  real  and  personal 
property  in  the  city  of  Providence,  it  is  nevertheless 
probable  that  the  inequality  is  really  very  considera- 
ble ; possibly  as  great  as  in  any  city  of  the  country. 


sonal  property  in  1842  was  $2,217,975;  and  in 

1869,  $2,166,411,  showing  a decrease  in  twen- 
ty-seven years  of  $51,564.  But  the  national 
bank  capital  of  two  cities  of  this  county,  on  the 
1st  of  October,  1870,  with  surplus  and  undivi- 
ded profits,  was  $2, 172,000,  or  $6411  more  than 
the  whole  personal  property  of  the  county  re- 
turned during  the  same  year  for  assessment.  * 

In  1835  the  personal  estate  of  Westchester 
county  was  returned  at  $2,324,693,  with  a pop- 
ulation of  38,789.  In  1870,  with  a population 
considerably  in  excess  of  100,000,  the  assessed 
value  was  $7,709,512;  or  only  $4,928,880  in 
excess  of  what  it  was  in  1853. 

In  1858  the  personal  estate  of  Dutchess  county 
was  assessed  at  $7,701,502  ; in  1870,  at  $8,825,- 
233 ; showing  an  increase  in  twelve  years  of 
only  $1,123,731. 

In  1868  the  personal  estate  of  Erie  county  was 
assessed  at  $11,43 1,680;  in  1870,  at  $8, 155,240  ; 
showing  a decrease  in  two  years  of  $3,276,440. 

In  Monroe  count ij  personal  estate  was  assess- 
ed in  1858  at  $4,414,362  ; in  1870,  at  $2,739,- 
692 ; showing  a decrease  in  twelve  years  of 
$1,674,670.  In  1865  the  value  of  the  farm 
stock  of  this  county  was  returned  at  $3,408,- 
109;  and  of  farm  implements  at  $941,997. 
The  capital,  surplus,  and  undivided  profits  of 
the  national  banks  of  Rochester  on  the  1st  of 
October,  1870,  was  $1,558,206;  while  the  ag- 
gregate deposits  of  the  savings  banks  of  the 
same  city  of  the  1st  of  January,  1871,  were  con- 
siderably in  excess  of  $7,000,000. 

In  1858  the  personal  property  of  the  county 
and  city  of  Albany  was  assessed  at  $8,310,141  ; 
in  1870  at  $7,535,171  ; showing  a decrease  in 
twelve  years  of  $874,970. 

In  1842  the  valuation  of  the  personal  estate 
of  Onondaga  county  was  $1,891,954  ; in  1870, 
$4,275,275;  showing  an  increase  in  eighteen 
years  of  $2,384,321.  The  capital,  surplus,  and 
undivided  profits  of  the  national  banks  of  Syr- 
acuse, in  this  county,  on  the  1 8th  of  October, 

1870,  were  $1,656,548;  the  capital  of  the  On- 
ondaga Salt  Company,  $1,200,000,  and  the  re- 
sources of  the  savings  banks  of  Syracuse,  Janu- 
ary 1st,  1870,  $3,650,264;  making  a total  of 
$6,506,812,  or  $2,231,537  in  excess  of  the 
valuation  of  the  personal  estate  of  the  whole 
county. 

It  would  seem  as  if  no  intelligent  person  could 
give  the  slightest  consideration  to  the  facts  re- 
vealed in  the  foregoing  tables  and  statements 
without  arriving  at  the  fullest  conviction  that 
the  valuation  of  personal  property  for  the  pur- 
poses of  taxation  generally,  and  in  the  State  of 
New  York  especially,  is  a mere  semblance,  and 
a libel  upon  the  intelligence  and  honesty  of 
both  those  who  enact  and  those  who  administer 
the  laws.  But  the  evidence  thus  for  presented 
on  this  subject  is  bv  no  means  complete.  Of 
the  States  of  the  Union  lyhich  adopt  the  plan 
theoretically,  of  subjecting  all  real  and  personal 
property  to  a uniform  rule  of  assessment  and 
taxation,  Massachusetts  and  Connecticut  may 
be  selected  as  examples  in  which  the  greatest 


24 


LOCAL  TAXATION. 


measure  of  success  in  respect  to  the  execution  of 
the  law  has  been  attained  to;  and  beyond  the 
results  in  which,  as  reported,  nothing  better  is 
to  be  expected ; especially  in  Massachusetts, 
where  the  system,  both  as  regards  law  and  ad- 
ministration, is  regarded  as  practically  success- 
ful. And  yet  in  Massachusetts  the  opinion  has 
bfien  expressed  to  the  commission  by  the  most 
experienced  of  assessors,  that  of  the  personal 
property  of  the  citizens  of  the  State  subject  to 
taxation,  full  one-third  annually  escapes  valua- 
tion and  assessment ; while  in  Connecticut  the 
amount  is  estimated,  by  officials  most  conversant 
with  the  subject,  as  high  as  forty  per  cent. 

An  incident  of  recent  Massachusetts  experi- 
ence may  also  be  referred  to  as  both  instructive 
and  suggestive.  In  the  city  of  Boston  the  as- 
sessors are  removed  one  degree  from  the  peo- 
ple, being  elected  by  the  aldermen  and  Com- 
mon Council.  In  the  city  of  Dorchester  (that 
was),  on  the  other  hand,  the  assessors  owed 
their  places  directly  to  popular  election.  In 
January,  1870,  the  city  of  Dorchester,  by  vote 
taken  in  June,  1869,  was  annexed  to  and  be- 
came a part  of  Boston ; the  conditions  of  the 
election  of  the  assessors  in  the  former  city  be- 
ing* at  the  same  time  prospectively  changed  in 
conformity  with  the  Boston  rule.  Now,  it  may 
be,  that  between  these  changed  conditions  in  re- 
spect to  the  office  of  the  assessors  of  Dorchester 
there  was  no  necessary  connection  ; but  it  is 
nevertheless  a fact  that  the  officers  who,  elected 
by  popular  vote,  valued  the  property  of  Dorches- 
ter for  assessment  in  1868  at  $15,326,000, 
valued  the  same  property  on  the  succeeding 
year  (1869),  after  annexation  had  been  deter- 
mined upon,  at  $20,315,000,  or  at  an  advance 
in  one  year  of  nearly  thirty-three  per  cent. 
The  conclusion  in  any  event  would  seem  to  be 
inevitable,  either  that  the  people  of  Dorchester 
greatly  increased  in  worldly  goods  during  the 
year  1868-9,  or  else  that  the  Massachusetts  sys- 
tem of  taxation,  so  far  as  Dorchester  was  con- 
cerned, had  been  previous  to  1869- but  most  im- 
perfectly administered. 

In  Illinois,  another  State  where  the  uniform 
rule  of  valuation  and  assessment  of  all  property 
is  adopted,  the  Chicago  Board  of  Trade  report 
for  1869-70,  states,  “that  the  valuations  of 
property  for  taxation  (throughout  the  State)  are 
not  more*than  one-quarter  the  actual  cash  value 
of  the  different  kinds  of  property  assessed.” 
And  yet  the  statute  of  Illinois  requires  that  all 
property  shall  be  valued  and  assessed  at  its  act- 
ual and  true  value.* 


* State  Taxation  of  Illinois.— The  uniform  low  valu- 
ation of  property  for  assessment  purposes  in  Illinois 
admits  of  an  explanation,  which  in  itself,  however, 
constitutes  one  of  those  anomalies  of  taxation' in  the 
United  States  especially  worthy  of  record  and  preser- 
vation. 

Previous  to  the  adoption  of  the  Constitution  of  1S48, 
the  State  of  Illinois  had  practically  repudiated  her 
debt.  Payment  of  interest  had  stopped,  the  credit  of 
the  State  was  very  low,  and  a communitj'  exempt  from 
taxation  for  one  purpose  was  unwilling  to  be  taxed  for 
others.  Demagogues  impeached  the  validity  of  the 
State  debt,  and  opposed  any  taxation  for  its  payment. 
When  the  convention  met  in  1847  to  revise  the  Consti- 


An  incident  illustrative  of  the  condition  of 
taxation  in  another  Western  State  adopting  the 
same  system,  has  also  not  a little  of  significance. 
In  conversation  with  a gentleman  occupying 
high  official  station  under  the  Federal  Govern- 
ment, the  opinion  was  expressed  by  him  that  in 
his  State  the  existing  system  was  about  as  good 
as  it  could  be,  and,  withal,  just  and  equitable ; 
“and  yet,”  continued  the  relator,  “there  was 
one  circumstance  connected  with  myself  this 
year  that  struck  me  as  a little  singular.  I re- 
turned my  property  for  taxation  in  accordance 
with  the  exact  truth,  naming  a sum  much  under 
$ 1 00, 000,  and  some  days  subsequently  I was  wai  t- 
ed  upon  by  one  of  the  assessors  and  requested  to 
take  back  the  return  and  amend  it,  the  reason 
given  for  the  request  being,  that  I had  returned 
a larger  amount  of  personal  property  than  any 
other  one  individual  in  my  county,  where  I 
was  never  before  regarded  by  any  one  as  entitled 


tution,  this  debt  was  a perplexing  question  to  many. 
Finally,  distrusting  the  honesty  of  the  people,  the  con- 
vention submitted  to  a separate  vote  the  following  ar- 
ticle : 

“There  shall  he  annually  assessed  and  collected,  in 
the  same  manner  as  other  State  revenue  may  be  as- 
sessed and  collected,  a tax  of  two  mills  upon  each  dol- 
lar’s worth  of  taxable  property,  in  addition  to  all  oth- 
er taxes,  to  be  applied  as  follows,  to  wit : The  fund  so 
created  shall  be  kept  separate,  and  shall  annually,  on 
the  first  of  January,  be  apportioned  and  paid  over,  pro 
rata,  upon  all  such  State  indebtedness,  other  than  the 
canal  and  school  indebtedness,  as  may  for  that  pur- 
pose be  presented  by  the  holders  of  the  same,  to  be 
entered  as  credits  upon  and  to  that  extent,  in  extin- 
guishment of  the  principal  of  said  indebtedness.” 

The  people  ratified  this  by  a large  majority,  and  the 
tax  Avas  thus  made  permanent,  and  placed  beyond  the 
control  of  the  Legislature.  The  first  tax  was  collect- 
ed in  1849-50,  and  the  Legislature  then  provided  for 
the  immediate  funding  of  the  unpaid  interest,  and  in 
various  ways  for  the  ascertainment  and  funding  of 
the  principal  of  the  State  debt.  The  credit  of  the  State 
was  revived,  and  in  1852  the  State  entered  upon  that 
prosperity  for  which  it  has  been  ever  since  distin- 
guished. 

The  mode  of  assessment,  however,  which  had  pre- 
vailed previously  Avas  continued,  which  Avas,  for  each 
county  to  make  its  own  valuation  and  assessment  for 
taxation  ; and,  as  might  have  been  expected,  Avas  pro- 
ductive of  the  grossest  inequalities.  To  remedy  these, 
the  Legislature  felt  compelled,  in  18G7,  to  provide  for 
an  annual  meeting  of  a “board  of  equalization,” 
Avhich,  in  a degree,  accomplishes  the  Avork  designed 
for  it. 

The  Legislature  makes  the  annual  appropriations, 
and  there  is  a permanent  law  providing  for  a tax  for 
school  purposes  and  for  interest ; but  the  Legislature 
never  fixes  the  rate  of  tax.  The  auditor  ascertains  the 
amount  he  Avill  need  to  cover  the  appropriations  made 
by  the  Legislature,  and  taking  the  equalized  valuation 
by  the  board,  he  fixes  the  rate  so  as  to  produce  that 
sum  for  general  revenue,  including  the  cost  of  collec- 
tion. But  the  two-mill  tax  for  the  State  debt,  present- 
ed by  the  Constitution,  is  absolute,  and  has  to  be  col- 
lected whether  it  is  needed  or  not.  The  State  is  fur- 
thermore in  the  receipt  of  a large  annual  revenue  from 
the  Illinois  Central  Railroad,  and  this  revenue,  by  con- 
tract, is  also  applicable  to  the  same  purposes  as  is  the 
two-mill  tax.  The  result  is  that  the  State  is  in  the  re- 
ceipt of  a much  larger  revenue  than  it  can  apply  to  the 
extinguishment  of  its  debt ; and  to  avoid  the  collec- 
tion of  an  unnecessary  revenue  under  the  constitution- 
al two-mill  tax,  it  has  been  found  necessary  to  keep 
the  assessed  valuation  of  property  as  Ioav  as  possible. 
It  is  difficult  to  form  any  estimate  of  Avhat  the  actual 
value  of  the  State  property  is;  but  the  State  Auditor, 
in  1869,  estimated  the  State  valuation  at  not  in  excess 
of  tAventy-five  per  cent.  This  is  reported  to  the  com- 
missioner as  approximating  the  truth,  except  that  it 
varies  in  some  counties,  especially  in  Cook  cotmty — 
the  county  in  Avhich  Chicago  is  situated— Avhere  bank 
property  (shares)  have  been  at  times  taxed  to  their 
full  value. 


LOCAL  TAXATION. 


25 


to  be  classed  among  the  number  of  our  wealthy 
citizens.” 

As  before  stated,  the  personal  property  of  the 
entire  State  of  New  York  was  returned,  for  tax- 
ation for  the  year  1869-70,  at  $434,270,278, 
which,  with  a population  of  4,370,346,  would 
give  $99.13  per  capita.  On  the  other  hand, 
Massachusetts,  with  a population  of  only  1,457,- 
385,  returns  for  1869-70  a valuation  of  person- 
al property  of  $503,085,988,  or  at  the  rate  of 
$345.19  per  capita;  while  Ohio,  with  a popu- 
lation of  2,852,302,  returns  for  the  same  year  a 
valuation  of  personal  property  of  $459,762,252, 
or  at  the  rate  of  $189.67  per  capita. 

As  a further  contribution  of  information  rela- 
tive to  the  estimated  valuation  of  the  personal 
property  of  the  State,  attention  is  also  asked  to 
the  following  schedule  of  property  having  a situs 
within  the  State  of  New  York,  which,  for  the 
most  part,  would  be  classified  as  personal  in  any 
scheme  of  valuation  for  assessment  and  taxa- 
tion : 

8TEAM  RAILROADS. 


Capital  stock  paid  in... $192,882,640  00 

Amount  of  funded  debt 79,712,601  00 

Interest  certificates 23,036,000  00 

Total $295,631,241  00 

HORSE  RAILROADS. 

Capital  stock  paid  in $15,988,790  00 

Funded  debt 9,407,610  00 

Total $25,396,400  00 

NATIONAL  BANKS. 

Capital  paid  in  (October,  1870) $113,497,741  00 

Surplus 26,438,158  49 

Undivided  profits 15,138,076  80 

Total $155,073,976  29 

STATE  BANKS. 


Capital  of  banks  doing  business  under 
the  laws  of  the  State  (Sept.  30, 1S70) . $19,759,810  00 

SAVINGS  BANKS. 

Resources  (July  1, 1870) $208,607,148  00 

Real  estate  investments,  deducted. . . . 3,285,608  00 


$205,321,540  00 

NEW  YORK  STATE  FIRE  AND  MARINE  INSURANCE  COM- 
PANIES. 


Assets  over  all  liabilities,  except  capi- 
tal and  scrip  (Dec.  31, 1869) $61,958,998  00 

NEW  YORK  LIFE  INSURANCE  COMPANIES. 

Assets  over  all  liabilities,  except  capi- 
tal and  scrip  (Dec.  31,  1869) 20,471,297  00 

Fire  insurance  risks  in  force  in  the 
State  (Dec.  31, 1869) 2,300,306,952  41 

MISCELLANEOUS.'* 

Gas  companies,  estimated  capital $20,000,000  00 

Express  companies  and  associations, 
and  navigation  and  transportation 
companies,  other  than  railroads,  es- 
timated   40,000,000  00 

Ferry  and  bridge  companies,  esti- 
mated   6,000,000  00 

Water- works,  not  municipal 1,500,000  00 

Capital  employed  in  manufactures,  less 

real  estate,  estimated 150,000,000  00 

Value  of  farm  stock  and  other  ani- 
mals   140,000,000  00 


* The  estimates  here  given  under  the  head  of  mis- 
cellaneous are  not  presented  as  reliable,  but  simply  as 
approximations  which  are  not  in  excess  of  the  true 
value.  The  data  for  forming  reliable  estimates  are 
not  at  present  obtainable  by  the  commission. 


Other  personal  property,  i.  e.,  stocks  of 
' goods ; money  at  interest  or  employ- 
ed in  trade,  speculation,  or  private 
banking;  vessels,  vehicles,  furniture, 
pictures,  jewelry,  musical  instru- 
ments, watches,  plate,  libraries,  etc., 


estimated 500,000,000  00 

Estimated  value  of  farm  tools  and  im- 
plements, based  on  census  returns 

of  1565 25,000,000  00 

Estimated  value  of  the  annual  agricul- 
tural product  of  the  State 150,000,000  00 

Estimated  value  of  the  annual  product 
of  manufacturing  industry 400,000,000  00 


RECAPITULATION. 

The  sum  of  the  above  items,  exclusive  of  the 
estimated  annual  value  of  the  products  of  agri- 
culture and  manufacturing  industry,  amounts  to 
$1,665,013,262. 

The  following  deductions  from  the  statistics 
of  the  income  tax  levied  by  the  national  govern- 
ment will  also  assist  in  the  formation  of  an  opin- 
ion as  to  the  amount  of  personal  property  at 
present  existing  in  the  State  of  New  York. 

For  the  year  ending  June  30th,  1866,  the  na- 
tional government,  under  the  internal  revenue 
system,  is  reported  to  have  collected  income 
taxes  from  96,000  persons  in  the  State.  In 
that  year  an  income  of  $600  was  exempted  to 
each  person,  the  exemption  being  upon  the  earn- 
ings or  income  of  the  individual,  and  not  upon 
any  property  with  which  the  earnings  or  income 
may  have  been  associated.  This  exemption 
represented  $59,600,000,  while  the  revenue  de- 
rived from  the  income  tax  of  five  per  cent., 
amounting  to  $5,993,123,  represented  an  in- 
come of  nearly  $120,000,000.  During  the 
same  year  an  additional  revenue  of  twelve  mil- 
lions ($12,289,127)  was  also  collected  from  citi- 
zens of  New  York,  under  an  income  tax  of  ten 
per  cent,  on  the  excess  of  all  incomes  over  $5000, 
which  in  turn  represented  a further  income  of 
$120,000,000,  the  whole  showing  an  aggregate 
income  of  the  people  of  the  State  of  New  York, 
for  the  years  1865-66,  to  have  been  at  least 
$300,000,000,  and  which  if  capitalized  at  six  per 
cent,  would  represent  five  thousand  millions  of 
productive  property.  Now  the  valuation  of  all 
the  property  of  New  York,  for  the  purpose  of  as- 
sessment and  taxation  for  the  year  1870,  is  only 
$2,052,479,570.  Again,  in  a debate  in  the  con- 
' stitutional  convention,  1867-68,  Hon.  James  A. 
Bell,  who  was  chairman  of  the  joint  committee 
of  the  Legislature  in  1862-’63  for  the  revision 
of  the  laws  relating  to  taxation,  made  the  fol- 
lowing statement : 

“ The  committee  held  a session  in  New  York 
and  examined  into  the  manner  and  mode  of  the 
assessment  of  property  in  that  city.  We  ascer- 
tained that  only  about  $80,000,000  of  personal 
property  was  placed  upon  the  assessment  in  the 
entire  city.  The  committee  inquired  of  those 
who  came  before  them — and  they  were  gentle- 
men of  great  intelligence  and  business  capacity, 
one  of  them  of  the  firm  of  Brown,  Brothers  & 
Co. — if  they  thought  that  one-third  of  the  per- 
sonal property  of  New  York  city  was  placed  on 
the  assessment-roll.  This  gentleman  said  that 
his  acquaintance  was  limited  compared  with 


2G 


LOCAL  TAXATION. 


some  other  gentlemen,  but  he  believed  he  knew 
persons  owning  as  much  personal  property  as 
that  within  his  limited  circle  of  acquaintances.” 

In  the  same  debate,  another  delegate  (Mr. 
Pierrepont,  of  New  York)  stated  that  he  could 
name  in  the  State  “ thirty  men  whose  aggregate 
wealth  is  $450,000,000,  whose  individual  aver- 
age wealth  is  $15,000,000;”  or  over  twenty- 
live  millions  in  excess  of  the  valuation  for  that 
year  of  all  the  personal  property  of  the  entire 
State. 

The  following  are  illustrations  to  the  same 
effect  of  a more  specific  character.  In  the  city 
of  Brooklyn  the  aggregate  valuation  of  all  prop- 
erty for  the  current  year  is  $201,249,559 ; but 
of  this,  $183,689,579  represent  real  estate,  and 
only  $17,559,980  personal  property.  And  it  is 
to  be  further  noted,  that  of  this  seventeen  mil- 
lions valuation  of  personal  property  in  this  great 
city,  $7,956,820  are  assessed  against  corpora- 
tions, banks,  ferries,  gas  companies,  etc.,  leaving 
only  $9,603,160  against  individuals,  an  amount 
which  probably  does  not  equal  the  aggregate  per- 
sonal property  of  two  of  its  citizens. 

In  the  town  of  Batavia,  Genesee  county,  with 
a population  in  1865  of  about  6000,  the  valua- 
tion of  personal  property  for  the  years  1869-70 
is  reported  at  $954,995  ; while  the  neighboring 
city  of  Rochester,  with  a population  of  62,429, 
a savings  bank  deposit  alone  of  over  $7,000,000, 
and  with  corporation  stocks  to  an  aggregate  of 
over  $1,300,000,  the  valuation  of  personal  prop- 
erty for  the  same  year  is  only  $1,501,600,  or  but 
little  more  than  half  a million  in  excess  of  that 
of  the  small  town  of  Batavia.  And  yet  the  as- 
sessors who  value  and  enroll  personal  property 
for  assessment  in  the  State  of  New  York  are 
required  to  subscribe  to  an  oath  of  the  same 
effect  as  that  above  quoted  in  respect  to  the 
valuation  of  real  property,  viz.,  that  they  have 
enrolled  and  valued  the  same  at  its  “full  and 
true  value.” 

Similar  illustrations  to  almost  any  extent 
might  be  given,  if  any  further  evidence  was  nec- 
essary to  complete  the  demonstration  of  the  ut- 
ter inadequacy  of  the  present  system,  both  as 
respects  law  and  practice,  in  the  State  of  New 
York,  to  provide  for  the  assessment  and  collec- 
tion of  taxes  upon  personal  property.  The  com- 
missioners, therefore,  will  content  themselves 
with  making  but  a single  additional  reference 
on  this  point,  viz.,  to  a report  transmitted  to  the 
Legislature  January,  1864,  by  Theodore  C.  Pe- 
ters, at  that  time  one  of  the  State  assessors.  In 
this  report  the  following  opinion,  as  the  result 
of  much  investigation,  is  expressed  : “ Of  the 
taxable  property  of  the  State,  not  one-fifth  of 
the  personal  property  is  now  reached  ; while  the 
real  estate  is  assessed  upon  eleven-twentieths  of 
its  value,  personal  is  on  less  than  four-twen- 
tieths.” A further  conclusion  arrived  at  in  this 
report  was,  “ that  the  value  of  personal  property 
in  the  State  fully  equals  that  of  the  real  estate,” 
and  that  the  two  classes  in  1862  had  each  an  ap- 
proximative aggregate  value  of  $2,169,365,000, 
or  a total  of  $4,338,731,000. 


DISCUSSION  OF  REMEDIES. 

Having  thus  at  some  length  presented  the 
reasons  which  seem  to  require  prompt  action  on 
the  part  of  the  people  and  authorities  of  New 
York,  with  a view  of  reconstructing  or  improv- 
ing the  existing  system  of  valuing  and  assessing 
property  for  the  purpose  of  raising  revenue  to 
defray  general  and  local  expenditures  by  means 
of  taxation,  we  come  next  to  a consideration  of 
the  question  as  to  what  remedies  for  existing 
evils  are  likely  to  prove  both  efficient  and  ex- 
pedient. 

And,  first,  it  would  seem  that  there  could  be 
no  essential  difference  of  opinion  in  regard  to 
the  correctness  of  the  proposition,  that  the  ob- 
ject which  it  is  desirable  to  effect,  or  the  end  to 
be  attained  to,  is  equality  and  certainty  in  as- 
sessment and  collection  ; and,  furthermore,  that 
any  system  which  will  insure  equality  in  assess- 
ment, certainty  and  economy  in  collection,  and 
comparative  freedom  from  trouble  and  annoy- 
ance to  the  tax-payer,  will  in  itself  constitute 
the  perfection  of  taxation.  On  the  other  hand, 
when  there  is  uncertainty  and  inequality  in  the 
methods  of  assessment  and  collection,  the  tax 
becomes  a mere  arbitrary  exaction,  repellent 
and  destructive  alike  to  capital,  manufactures, 
and  commerce. 

It  is  an  error,  however,  to  assume  that  all  de- 
scriptions of  property  should  be  subjected  to  tax- 
ation in  order  to  insure  equality  and  uniformi- 
ty. On  the  contrary,  all  experience  has  shown 
— none  better  than  that  of  the  United  States — 
that  the  more  “ concrete  ” and  the  less  diffused 
a system  of  taxation  can  be  made,  the  better  for 
the  people  and  the  better  for  the  State ; for, 
with  the  exception  of  direct  taxes  on  income, 
and  upon  those  articles,  like  spirits  and  tobacco, 
which  are  consumed  solely  for  personal  gratifi- 
cation, taxation  distributes  itself  with  a won- 
derful degree  of  uniformity.  If  placed  upon 
land,  it  will  constitute  an  element  of  the  cost 
of  that  which  the  land  produces;  if  upon  man- 
ufacturing industry,  then  of  the  cost  of  the  prod- 
ucts of  such  industry ; upon  shipping,  of  the  cost 
of  that  which  the  ship  transports  ; upon  capital, 
of  the  cost,  price,  or  interest  which  is  paid  for 
the  use  of  such  capital ; and  if  upon  buildings, 
it  will  be  reflected  upon  the  income  of  the  occu- 
pier, or  upon  the  cost  of  the  goods,  wares,  and  mer- 
chandise stored,  exchanged,  or  produced  there- 
in. In  short,  “ to  the  extent  that  any  individ- 
ual or  class  can  transfer  the  onus  of  a tax  to 
others  by  including  it  in  the  price  of  his  com- 
modities or  services,  such  individual  invariably 
does  so.”*  And  so  a tax  imposed  upon  an  ar- 


* “ Each  individual  or  class  in  transferring  the  onus 
or  burden  of  his  taxation  to  others,  does  so  in  the 
face  of  a constantly  decreasing  number  of  those  left 
to  sustain  the  tax.  And  this  transfer  of  liability  oc- 
curs again  and  again,  till,  having  reached  the  farther- 
most, it  finds  its  way  back,  like  the  answering  ripples 
of  a pond,  or  the  responsive  echoes  of  a valley,  to  the 
point  whence  it  starts,  but  somewhat  modified  in  in- 
tensity ; every  intermediate  individual  or  class  having 
had  to  suffer,  in  the  increased  price  of  the  products  or 
I services  of  those  immediately  beyond  them,  a portion 


LOCAL  TAXATION. 


27 


tide  or  service  of  prime  necessity  to  a commu- 
nity, like  land  or  buildings,  for  example,  be- 
comes, in  effect,  a tax  upon  all,  without  the  vex- 
ations of  infinitesimal  application.  The  oil  op- 
erators find  that  one  well,  intelligently  sunk  in 
the  right  spot,  will  drain  the  whole  basin  better 
than  many,  with  less  expense  and  with  no  dis- 
turbance to  the  surrounding  country. 

But  while  it  is  not  necessary  to  tax  all  de- 
scriptions of  property  in  order  to  insure  equal- 
ity and  uniformity,  it  is  indispensable  that  no 
system  of  taxation  should  be  adopted  which 
will  not  act  uniformly  and  equally  upon  all 
property  of  the  same  kind,  or  upon  all  persons 
owning  the  same  class  of  property  within  the 
State  ; inasmuch  as  if  any  one  man  is  taxed, 
and  another  man  exempted,  on  the  same  class 
or  description  of  property,  the  tax  assumes 
the  character  of  confiscation.  In  fact,  in  al- 
most every  community  it  is  not  so  much  the  ex- 
tent as  it  is  the  inequality  that  constitutes  the 
burden  of  taxation,  and  the  commission  have 
been  impressed  with  the  circumstance  that  in 
conversing  with  the  heaviest  tax-payers  of  the 
State  it  has  not  been  so  much  the  amount  paid 
that  is  complained  of,  as  it  is  that,  while  the  in- 
dividual in  question  claims  to  pay,  his  neighbors 
and  associates  in  some  way  manage  to  escape. 

In  the  soundings  which  have  recently  been 
made  at  great  depths  in  the  ocean  for  telegraphic 
or  other  purposes,  the  sounding-line  has  notunfre- 
quently  brought  up  from  the  bottom  small  cham- 
bered shells  or  other  minute  animals  of  exqui- 
site organization  and  structure ; and  the  question 
naturally  arises,  in  what  manner  can  these  mi- 
nute organisms  live  and  flourish  under  the  enor- 
mous pressure  that  in  some  instances  must  be 
exerted,  of  at  least  three  tons  to  the  square 
inch?  The  explanation  is  to  be  found  in  the 
circumstance  that  the  pressure  is  everywhere 
equalized,  being  as  much  from  within  outward 
as  from  without  inward,  and  thus  an  equilibrium 
is  maintained  under  which  development  goes  on 
and  existence  is  made  possible ; and  it  is  in 
preserving  this  equilibrium,  this  equalization  of 
pressure  (says  Mr.  Lowe,  from  whose  speech  as 
chancellor  of  the  English  Exchequer  the  above 
illustration  is  derived),  that  the  whole  secret  of 
taxation  consists.  All  experience  shows  that  a 
people  who  are  moderately  prosperous  will  bear 
the  heaviest  burdens  of  taxation  without  com- 
plaint when  they  feel  that  the  distribution  is 
just  and  equal ; but  when  the  distributions  are 
unequal,  somebody  inevitably  is  being  either 
plundered  or  crushed. 

And  hence  is  made  apparent  the  gross  injus- 
tice that  has  been  committed  in  maintaining  by 
the  States  of  the  Union  a system  of  taxing  per- 
sonal property  generally,  and  yet  at  the  same 
time  of  exempting  from  taxation  under  the  over- 
ruling authority  of  the  national  government  the 


of  the  liability.  These  ripples  and  answering  ripples 
of  transferred  liability,  after  repeatedly  flowing  back 
and  forth  to  one  another,  at  length  come  to  a compar- 
ative state  of  rest;  and  thus  all  members  of  the  com-  j 
munity  become  eventually  equally  burdened."  i 


equivalent  of  full  one-fifth  of  all  such  property 
(national  securities)  under  the  plea  of  necessity. 

But  to  remedy  the  evils  inherent  in,  or  grow- 
ing out  of  its  system  of  taxation  as  it  exists  to- 
day in  New  York,  and  in  most  of  the  other 
States,  two  courses,  and  two  only,  would  seem 
open  for  adoption.  1st,  to  attempt  to  amend 
and  strengthen  the  present  system.  2d,  to  con- 
struct a new  system. 

REFORM  BY  WAY  OF  AMENDMENT. 

Valuation  of  Real  Estate. — And  in  discuss- 
ing the  nature  and  scope  of  the  amendments 
which  may  seem  necessary  to  perfect  the  exist- 
ing system,  the  subject  of  real  estate  or  real 
property  naturally  comes  first  in  order  for  con- 
sideration. 

Here  every  thing,  as  the  term  implies,  is  real, 
tangible,  visible  ; something  which  can  not  be 
concealed ; something  which  can  not,  under 
any  circumstances,  be  removed  beyond  the  ju- 
risdiction of  the  State,  except  by  transfer  to 
the  Federal  Government ; something  concerning 
which  the  laws  and  decisions  of  the  courts  har- 
monize rather  than  conflict.  In  the  valuation 
of  real  property,  furthermore,  it  is  possible  to 
apply  such  tests  and  verifications  as  will  re- 
strict the  errors  of  estimate  within  comparative- 
ly narrow  limits.  It  would  also  seem  as  if  the 
law  as  it  now  stands  was  sufficiently  clear  and 
explicit  in  its  declaration  and  mandate  ; and  if 
it  is  not,  a very  simple  enactment  is  all  that  is 
requisite  to  make  it  so.  Thus  the  language  of 
the  statute  is  as  follows  : 

uAll  lands  within  this  State , whether  owned 
hy  individuals  or  corporations , shall  be  liable  to 
taxation.  The  term  ‘ land,'  as  used  in  this 
chapter , shall  be  construed  to  include  the  land 
itself  all  buildings , and  all  other  articles  erect- 
ed upon  or  affixed  to  the  same ; all  trees  and  un- 
derwood growing  thereon , and  all  mines , miner- 
als, quarries,  and  fossils  in  and  under  the  same." 
—1  R.  S .,  387. 

11  All  real  estate  liable  to  taxation  shall  be  esti- 
mated and  assessed  by  the  assessors  at  its  full  and 
true  value,  as  they  would  appraise  the  same  in 
payment  of  a just  debt  due  from  a solvent  debtor." 
— 1 R.  S .,  as  amended,  1851,  chap.  176;  and, 
on  completion  of  the  assessment-roll,  the  as- 
sessors are  severally  required  to  appear  before  a 
justice  and  make  and  subscribe  an  oath,  to  the 
effect  that  they  have  set  down  all  the  real  es- 
tate in  the  district  (town  or  ward)  subject  to 
their  jurisdiction,  and  that  they  have  estimated 
its  value  11  at  the  sums  which  a majority  of  the 
assessors  have  decided  to  be  the  full  and  true  val- 
ue thereof,  and  at  which  they  would  appraise  the 
same  in  payment  of  a just  debt  due  from  a solv- 
ent debtor."  “ And  every  assessor  who  shall 
willfully  swear  false  in  taking  and  subscribing 
said  oath,  shall  be  deemed  guilty  of  and  liable  to 
the  penalties  of  willful  and  corrupt  perjury." — 1 
R.  S.,  chap.  176,  § 8. 

It  is  difficult  to  see  how  language,  other  than 
this,  could  be  made  more  clear  and  explicit ; 
i and  it  is  accordingly  evident  that  if  the  law 


28 


LOCAL  TAXATION. 


fails  in  its  execution,  as  it  certainly  does,  the 
fault  is  not  in  the  statute,  hut  in  its  administra- 
tion. The  remedy,  therefore,  must  be  found  in 
making  the  administration  more  effective,  or  in 
compelling  the  assessors  to  do  their  duty  in  ac- 
cordance with  the  strict  meaning  and  provisions 
of  the  statute.  And  this,  in  the  opinion  of  the 
commissioners,  can  only  be  effected  by  the  cre- 
ation of  some  central  authority,  either  a single 
commissioner  of  taxes,  as  in  Massachusetts,  or 
a board  of  commissioners,  whose  tenure  of  office 
should  be  made  as  permanent  and  as  far  re- 
moved from  partisan  influences  as  possible ; 
and  who,  clothed  with  all  proper  authority, 
and  supported  by  the  law  officers  of  the  State, 
should  be  required  to  practically  enforce  the 
laws,  by  providing  for  revaluations  of  real  prop- 
erty when  the  same  are  evidently  defective  and 
erroneous ; and  by  prosecuting,  to  the  full  ex- 
tent of  the  law,  all  derelictions  of  duty  on  the 
part  of  the  assessors.  Such  a provision  of  re- 
form necessarily  involves  the  creation  of  new 
officers  and  some  expenditure ; but  if  the  prop- 
er officer  or  officers  can  be  found,  the  'State  can 
make  no  expenditure  from  which  the  return 
would  be  more  prompt,  ample,  and  beneficial. 
As  it  now  is,  the  system  has  no  recognized  head 
or  central  spirit  of  authority,  whose  sole  prov- 
ince is  to  secure  alike  the  enforcement  of  the 
laws,  and  to  learn,  by  experience  and  investiga- 
tion, how  best  to  remedy  their  imperfections. 

It  is  important  to  further  state  in  this  con- 
nection, that  there  does  not  appear  to  be  any 
practical  difficulty  in  the  valuation  and  assess- 
ment of  real  estate  at  its  true  or  approximative 
cash  value,  as  is  often  supposed,  and  in  fact  was 
asserted  in  the  debates  on  this  subject  in  the 
New  York  constitutional  convention  of  1867-68. 
Such  a valuation  is  an  essential  feature  of  the 
system  of  Massachusetts,  and  is  carried  out  to 
a great  extent  at  least  in  the  city  of  Boston. 
It  has  also  been  formally  adopted  within  the 
last  few  years  in  the  cities  of  Philadelphia  and 
Chicago,  as  a substitute  for  what  has  been  term- 
ed the  previous  “guess-work  system,”  and  in 
both  cases  it  is  reported  as  working  successfully. 
In  the  city  of  Providence,  R.  I.,  as  one  method 
of  securing  a true  valuation  of  real  property,  a 
registry  of  all  sales  of  real  estate,  at  the  time 
of  such  sale,  with  the  consideration  given  for 
the  same,  is  made  obligatory  ; and  as  the  record 
of  such  sales  influences  or  determines  the  mar- 
ket value  of  such  property,  it  becomes  an  object 
for  those  interested  or  dealing  in  real  estate  to 
see  that  this  particular  requirement  of  law  is 
complied  with. 

The  effect  of  the  change  in  a specific  instance, 
from  a “ guess-work  ” to  a “ cash  ” basis  of  val- 
uation, as  shown  by  the  statistics  of  Philadel- 
phia, is  too  remarkable  to  be  passed  over  in  this 
discussion.* 

* The  interpretation  put  upon  the  term  “cash  val- 
ue,” or  “cash  sale,”  in  the  valuation  of  real  estate  in 
Philadelphia,  is  thus  explained  in  the  following  state- 
ment of  the  chairman  of  the  board  of  revision  of  taxes 
in  that  city. 

“I  have  given  a construction  to  our  law  that  it  does 


The  laws  of  Pennsylvania,  in  common  with 
those  of  New  York,  had  indeed  for  many  years 
required  the  assessment  of  real  property  to  be 
made  on  a basis  of  “ actual  value,”  with  an 
oath  on  the  part  of  the  assessors  (and  a penalty 
for  false  swearing,  or  neglect)  that  the}r  had 
complied  with  its  provisions  ; but  in  Philadel- 
phia, as  to-day  also  in  New  York,  the  law  had 
never  been  executed  until  1868,  when  the  su- 
pervision and  control  of  the  assessment  and  col- 
lection of  taxes  in  Philadelphia  was  intrusted 
to  a commission  of  three  officers,  called  the 
“board  of  revision  of  taxes,”  who  both  under- 
stood and  were  determined  to  discharge  their 
duties.  The  results  of  their  work  were  shown 
in  the  fact  that  in  the  first  year  the  valuation 
of  real  estate  advanced  from  $160,350,666  to 
$445,563,321 ; and  of  personal  property  (the  de- 
scriptions of  personal  property  liable  to  taxa- 
tion in  Philadelphia,  as  before  shown,  being  lim- 
ited), from  $3,737,785  to  $7,954,169;  while 
the  rate  of  taxation  decreased  from  $4  to  $1.40. 
The  above  facts  are  also  further  illustrated  by 
the  following  table,  which  shows  the  valuation 
of  real  and  personal  property,  and  the  rate  of 
taxation,  in  the  city  of  Philadelphia  from  1866 
to  1871,  inclusive : 


Years. 

Real  estate. 

Furniture, 
horses,  and 
carriages. 

Total. 

Tax  rate 
per  $100. 

1866 

$159,590,142 

$3,241,687 

$162,831,829 

$4.00 

1867 

160,350,666 

3,737,785 

164,088,451 

4.00 

1868 

445,563,331 

7,954,169 

453,517,490 

1.40 

1869 

456,137,222 

7,767,767 

463,904,989 

1.80 

1870 

470,851,800 

8,188,873 

479,776,643 

1.80 

1871 

491,844,096 

8,592,786 

500,436,882 

1.80 

That  this  method  of  valuing  real  property  at 
its  actual  value,  and  exempting  in  a great  de- 
gree personal  property  from  taxation,  does  not, 
moreover,  in  any  way  retard  improvements  in 
real  estate  in  Philadelphia,  is  proved  by  the  fol- 
lowing statement  made  to  the  commissioners  by 
a leading  authority  of  that  city,  under  date  of 
January  6,  1871 : 

“ We  build  double  the  number  of  houses  that 
we  did  in  any  year  previous  to  1867  (when  the 
valuation  was  increased),  and  capital  was  never 
more  willing  to  invest  in  the  building  of  dwell- 
ing-houses than  at  the  present  time ; already 
blocks  of  hundreds  have  been  contracted  for, 
to  be  commenced  as  soon  as  the  weather  will 
permit  in  1871.” 


not  mean  ‘cash  sale,’ but  ‘fair  sale;’  such  as  usual- 
ly made:  say  cash,  or  part  cash  aud  part  mortgage. 
The  truth  is,  that  few  sales  are  made  in  cities  for  all 
cash  ; and  mortgages  being  easily  negotiable,  the  rule 
is  a fair  one.  My  reason  for  this  ruling  was  that  we 
could  be  guided  by  the  ordinary  sales,  and  it  made 
greater  equality  according  to  the  actual  value.  For  if 
a property  worth  $2500  were  exposed  for  sale  for 
cash,  there  were  hundreds  of  people  who  could  com- 
mand that  amount  of  money,  and  pay  the  full  value 
of  it ; but  if  a building  and  lot  worth  $300,000  was  so 
exposed,  very  few  of  those  who  were  able  to  buy  so 
large  a property  would  be  willing  to  pay  all  cash. 

! So  that  the  larger  and  more  valuable  the  property 
i was,  the  less  tax  it  would  pay  in  proportion  to  its  act- 
1 ual  value,  if  we  had  to  rate  it  at  what  it  would  bring 
at  a ‘ cash  sale.’  For  this  reason,  I think  rating  at  a 
‘ fair  sale  ’ better  than  a ‘ casl}  sale.’  It  leads  to  great- 
er equality,  according  to  actual  value." 


LOCAL  TAXATION. 


29 


VALUATION  OP  PERSONAL  PROPERTY. 

Coming  next  to  the  consideration  of  personal 
property  with  reference  to  its  valuation  and  as- 
sessment, we  find  the  circumstances  altogether 
different  from  those  which  obtain  in  respect  to 
real*  property.  Here  much  of  the  property 
which  it  may  be  desirable,  and  under  the  pres- 
ent system  is  made  obligatory  on  the  assessors 
to  assess,  is  invisible  and  incorporeal ; easy  of 
transfer  and  concealment ; not  admitting  of  val- 
uation by  comparison  with  any  common  stand- 
ard ; and  the  determination  of  the  situs  of  which, 
as  will  be  hereafter  shown,  constitutes  one  of 
the  oldest  and  most  controverted  questions  of 
law.  When  once,  moreover,  personal  property 
is  valued  and  enrolled  for  assessment,  the  as- 
sessment-list is  necessarily  subject  to  losses 
which  never  occur  in  respect  to  real  property. 
Business  firms  assessed  on  their  merchandise, 
machinery,  or  capital,  fail,  dissolve,  and  break 
up,  and  the  taxes  are  practically  abandoned. 
Householders  break  up,  sell  their  personal  ef- 
fects, leave  the  place  of  their  assessed  residence, 
and  the  tax  levied  upon  them  is  lost.  Deaths 
break  up  households,  and  the  property  ceases  to 
exist  as  assessed.  To  this  must  be  added,  es- 
pecially in  the  large  towns  and  cities,  house- 
holders whose  only  taxable  property  is  their 
household  furniture,  valued  at  all  sums  from 
$250  to  $1000  (the  former  being  the  amount 
exempted  by  law  from  execution,  and  conse- 
quently from  taxation),  and  whose  taxes,  if  as- 
sessed according  to  law,  would  range  from  ten 
to  twenty  dollars.  A large  majority  of  these 
are  very  poor  people,  or  people  of  such  limited 
means  that  they  will  not  pay  the  tax  except  by 
compulsory  legal  process,  and  the  resort  to  this, 
public  opinion  generally,  in  every  enlightened 
and  Christian  community,  never  has  and  proba- 
bly never  will  sanction. 

Fully  recognizing  these  facts,  the  recognition 
being  due  in  most  instances  to  years  of  tentative 
experience,  all  the  leading  civilized  and  com- 
mercial nations  on  the  face  of  the  globe  (and 
the  commission  think  they  are  warranted  in 
making  the  assertion  broader,  and  in  saying 
every  nation,  civilized  or  uncivilized),  with  the 
single  exception  of  the  United  States,  have 
abandoned  all  attempts  to  levy  a direct  tax  on 
personal  property  in  the  possession  of  individ- 
uals, as  something  entirely  beyond  the  reach  of 
any  power  of  constitutional  law,  or  indeed  of 


* The  use  of  the  words  t{real  property”  is  wholly 
arbitrary.  In  the  days  when  the  distinction  between 
it  and  personal  estate  was  first  made,  that  class  of 
real  property  which  consists  of  buildings  was  too  un- 
important and  of  too  little  value  to  claim  a separate 
title.  But  of  course,  at  present,  a house  is  an  invest- 
ment of  fixed  capital,  and  is  analogous  to  any  other 
kind  of  similar  investment ; as  for  example,  machin- 
ery. The  rent  of  a house  when  the  ground  is  distin- 
guished from  the  buikling-reut  is  merely  interest  on 
capital,  and  ought  to  be  put  in  the  same  classification. 
And  it  may  be  here  observed,  that  at  the  time  when 
the  distinction  was  made,  personal  was  much  more 
valuable  than  real  estate. — Thorold  Rogers  on  the  In- 
cidence of  Local  Taxation , Journal  London  Statistical 
Society.  June , 1870. 


any  power  save  that  possibly  of  an  absolute  des- 
potism, to  effect,  with  any  degree  of  perfectness 
or  equality ; while  the  opinion  of  the  civilized 
world  generally  is  further  agreed  that  all  at- 
tempts to  practically  enforce  laws  of  this  char- 
acter are  alike  prejudicial  to  the  morals  and  ma- 
terial development  of  a State.  And  the  com- 
mission would  add  that  in  this  latter  respect  the 
experience  of  the  United  States  constitutes  no 
exception.  As  one  illustration  of  the  truth  of 
this  statement,  attention  is  called  to  the  circum- 
stance that  in  the  recent  report  of  the  commis- 
sion appointed  by  the  British  Parliament  during 
the  past  year  to  inquire  into  the  subject  of  local 
taxation,*  a large  octavo  volume  of  300  pages, 
there  is  hardly  a reference  made  to  the  subject 
of  the  taxation  of  personal  property  in  Great 
Britain,  except  incidental  allusion  here  and 
there,  expressive  of  the  opinion  of  the  experts 
under  examination  of  its  impracticability  and  in- 
expediency. Thus  Mr.  Francis  Cochran,  col- 
lector of  taxes  for  the  county  and  city  of  Aber- 
deen, Scotland,  being  under  examination,  stated 
the  principle  of  local  assessments  in  the  laws  of 
Scotland  to  be  this:  “That  while  one-half  of 
the  assessment  was  required  to  be  levied  from 
the  landlord  on  heritable  property,  the  other 
half  was  required  to  be  levied  from  the  inhabit- 
ants of  the  parish,  according  to  their  means  and 
substance.”  Many  disputes  arose  about  “means 
and  substance,  and  the  Court  of  Sessions  ulti- 
mately came  to  the  decision , which  they  made  au- 
thoritative,, that  it  was  a preferable  plan  to  take 
the  rents  of  occupied  premises  as  an  index  of 
means  and  substance , rather  than  to  attempt  to  get 
at  the  means  and  substance  themselves”  Ques. 
“ With  regard  to  the  meaning  of  this  expression 
‘ means  and  substance ,’  will  you  state  to  the 
committee  -whether  you  mean  by  it  personal 
property  as  well  as  real?”  Ans.  “The  expres- 
sion ‘means  and  substance,’  I think,  was  first 
introduced  about  the  middle  of  the  sixteenth 
century  in  the  Scotch  statutes,  and  its  interpre- 
tation at  first,  no  doubt,  was  not  very  clear  or 
well  defined,  or  understood ; but  ultimately  it 
came  to  be  understood  in  the  poor-law  phrase- 
ology as  meaning  all  estate  except  heritage, 
which  was  charged  separately.  Then  various 
disputes  necessarily  occurred  as  to  whether  it 
was  chargeable  upon  a man  at  the  place  in  the 
parish  where  the  business  was  carried  on,  or  in 
the  parish  where  he  lived.  Some  people  had 
the  pleasure  of  being  assessed  both  where  they 
lived  and  where  they  carried  on  their  business, 
but  the  poor-law  act  of  1845  put  that  all  right 
and  defined  it  distinctly.  But  I may  mention  that 
the  system  was  found  to  be  unworkable , and  these 
parishes  which  had  the  means  and  substance  system , 
which  were  very  few , had  it  gradually  changed , 
as  they  were  permitted  to  do  under  the  act ; and 
in  1861,  or  thereabouts , an  act  was  passed  by 
the  Legislature  abrogating  it  entirely , so  that  it  is 
at  an  end , and  the  index  which  the  court  sanctioned 
is  adopted  instead  of  it , namely , occupancy  ” 


* See  previous  notice  of  this  report. 


30 


LOCAL  TAXATION. 


And  again,  Mr.  D.  P.  Fry,  a member  of  the  I 
legal  department  of  the  poor-law  board,  being 
under  examination,  the  question  was  asked : 
“Are  you,  aware  of  any  instances  in  which  the 
highway  rate  has  been  levied  on  stock  in  trade 
in  towns?”  A.  “I  am  not  aware  of  any  in- 
stances in  which  the  highway  rate  separately 
has  been  so  levied ; but  there  are  still  existing 
places  in  which,  under  local  acts,  personal  prop- 
erty is  ratable  to  the  poor  rates — i.  e.,  stock 
in  trade,  shipping,  and  property  of  that  kind — 
and  I should  apprehend  that  in  those  places  it 
would  be  equally  ratable  to  the  highway  rate.” 
Q.  “But  you  can  not  mention  any  specific  in- 
stance?” A.  “I  can  not  mention  any  instance 
in  which  I know  as  a fact  that  it  is  rated  to  the 
highway  rate.  I merely  infer,  from  the  fact  of 
its  being  rated  to  the  poor  rate,  that  it  would 
be  also  rated  to  the  highway  rate,  but  I do  not 
know  that  it  is  so  positively.”  Q.  “Where  are 
those  places?”  A.  “ Sunderland  is  one,  and  I 
believe  there  are  some  others ; but  it  is  done 
under  local  acts.” 

And  in  connection  with  these  statements,  con- 
sideration should  not,  morever,  fail  to  be  given 
to  the  circumstance  that  in  Great  Britain,  where 
taxation  of  personal  property  has  especially  been 
done  away  with,  the  real  estate  is  vested  in  the 
hands  of  a comparatively  small  part  of  the  popu- 
lation : and  yet  it  is  these  few,  or  their  imme- 
diate representatives,  who  are  now  and  have 
been  almost  exclusively  the  law-makers,  and  as 
such  have  created  and  maintained  the  existing 
tax  system,  which,  while  levying  all  local  taxes 
upon  the  occupiers  of  land  in  the  first  instance, 
or,  in  effect,  upon  real  estate,  is  nevertheless  re- 
garded as  equivalent,  through  the  law  of  the 
diffusion  of  taxes,  to  a real  and  effective  taxation 
upon  personal  property. 

THE  ROMAN  METHOD  OF  TAXING  PERSONAL 
PROPERTY. 

Again,  the  records  of  the  experience  of  Rome 
in  the  latter  days  of  the  empire,  in  respect  to 
this  matter  of  the  taxation  of  personal  proper- 
ty, may  be  claimed  to  embody  more  of  practi- 
cal significance  and  instruction  than  all  else 
that  has  been  heretofore,  or  may  be  hereafter 
written  on  this  subject ; inasmuch  as  the  Ro- 
man, in  his  capacity  of  law-maker  or  adminis- 
trator, does  not  appear  to  have  ever  been  influ- 
enced to  any  great  degree  in  his  public  policy 
by  either  moral  or  political  considerations.  And 
the  record  of  this  experience  is  to  this  effect : 
Land,  slaves,  and  cattle,  visible,  tangible  prop- 
erty, were  surveyed  and  enrolled  by  officers 
corresponding  to  the  modern  assessors ; but  in 
respect  to  other  things,  in  the  nature  of  person- 
al property,  the  proprietor  was  questioned  under 
oath  by  the  officials,  who  were  at  the  same  time 
authorized  at  their  pleasure  to  administer  torture  ; 
thus  recognizing  what  was  then,  equally  as  now, 
a clear  and  well-defined  principle,  namely,  that 
if  a search  is  to  be  made  successfully  for  that 
which,  under  ordinary  circumstances,  is  in  it- 
self incorporeal,  invisible,  and  intangible,  there 


must  be  at  the  same  time  an  exercise  of  extra- 
ordinary means. 

That  these  extraordinary  means,  furthermore, 
were  resorted  to,  is  proved  by  a variety  of  evi- 
dence: One  writer  of  the  time  (Zosimus)  la- 
menting that  the  period  of  the  tax  collection 
upon  general  industry  “was  announced  by  the 
tears  and  terrors  of  the  citizens,  who  were  often 
compelled  by  the  impending  scourge”  to  meet 
their  obligations;  and  Gibbon,  in  treating  of 
this  feature  of  Roman  history,  in  a measure  jus- 
tifies the  proceeding  in  the  following  language : 

‘ ‘ The  secret  wealth  of  commerce,  and  the  pre- 
carious profits  of  art  and  labor,  are  susceptible 
only  of  a discretionary  valuation ; and  as  the 
person  of  the  trader  supplies  the  want  of  a vis- 
ible and  permanent  security,  the  payment  of 
the  imposition,  which,  in  the  case  of  a land  tax, 
may  be  obtained  by  the  seizure  of  property,  can 
rarely  be  extorted  by  any  other  means  than 
those  of  corporeal  punishment.” 

And  it  is  also  especially  worthy  to  note,  that 
in  every  instance  in  which  attempts  have  been 
made  of  late  in  the  United  States  to  remedy  the 
recognized  imperfections  and  inequalities  of  ex- 
isting systems  of  local  taxation,  the  persons  in- 
trusted with  the  duty,  possibly  without  know- 
ing, and  probably  without  caring,  what  was  the 
experience  and  custom  of  the  old  Romans,  have 
been  led  by  their  instincts  and  intuitions  to  go 
as  far  in  the  torture  direction  for  the  obtaining 
of  taxes  on  personal  property  as  the  conditions 
of  our  modern  civilization  and  the  state  of  pub- 
lic opinion  would  allow.*  And  it  should  be 
also  added,  in  order  to  make  the  statement 
complete,  that  in  every  instance  (as  before 
shown)  where  such  systems  have  been  fairly 
presented  to  Legislatures  or  the  people,  they 
have  failed  to  secure  either  attention  or  ap- 
proval. 

MODERN  METHODS  OF  TAXING  PERSONAL 
PROPERTY. 

But  the  question  nevertheless  recurs : Sup- 
posing the  present  defective  method  of  taxing 
personal  property  is  not  to  be  tolerated  (and  on 
this  point  the  commission  believe  there  is  a com- 
plete unity  of  public  sentiment),  what  course  is 
to  be  recommended  to  New  York  for  adoption  ? 
And  in  answer  to  this  it  is  to  be  said,  that  if  the 
Legislature  and  the  people  are  decidedly  of  the 
opinion  that  the  present  theory  of  taxing  all  per- 
sonal property  directly,  wherever  it  can  be  found, 
either  in  the  hands  of  individuals  or  corpora- 
tions, and  to  the  full  extent  of  the  power  and 
jurisdiction  of  the  State,  is  correct  and  must  be 
maintained,  then  the  law  which  aims  to  carry 
such  a theory  into  effect  must  be  made  far  more 
stringent,  severe,  and  mandatory  than  it  now  is ; 
the  assessors  must  be  invested  with  greater  and 
almost  arbitrary  powers,  to  inquire,  fine,  or  oth- 
erwise punish ; and  some  central  authority,  as 

* See  notice  of  the  “ Act  for  levy  and  collection  of 
taxes,”  prepared  by  the  Board  of  Equalization  of  Illi- 
nois (given  hereafter),  as  described  by  the  Chicago 
Tribune. 


LOCAL  TAXATION. 


31 


before  recommended,  must  in  addition  be  cre- 
ated, to  see  that  the  assessors  in  turn  are  in  no 
wise  derelict  of  their  duty.  If  this  is  the  view 
that  commends  itself,  then  the  draft  of  the  law 
prepared  by  the  joint  committee  of  the  Legisla- 
ture in  1862-63,  or  the  system  of  Massachusetts, 
or  that  of  Connecticut,  or  better,  the  system  which 
was  proposed  by  the  “ tax  commission  ” of  Con- 
necticut in  1868  and  subsequently  rejected  by  the 
Legislature  of  that  State,  or  the  more  recent  work 
of  the  Board  of  Equalization  of  Illinois,  are  all 
at  hand,  ready  to  serve  as  models.  And  when 
we  have  accepted  these  as  the  basis  of  action, 
we  may  be  assured  that  we  have  the  results  of 
the  most  mature  judgment  and  of  the  largest 
practical  experience  in  the  direction  indicated. 

It  is  obvious,  however,  that  the  essential  fea- 
ture of  any  system  which  aims  to  tax  property 
which  is  in  great  part  incorporeal,  invisible,  and 
intangible,  must  be,  as  already  stated,  the  pro- 
vision of  extraordinary  means  whereby  such 
property  may  be  “got  at,”  enrolled,  or  valued 
for  assessment. 

The  New  York  committee  of  18 62-63  arrived 
at  the  conclusion  that  the  “only  true  and  cer- 
tain way  ” was  “ to  make  every  man,  under  the 
solemnity  of  an  oath,  become  his  own  assessor, 
by  compelling  him  to  give  a full,  minute,  and 
complete  detail  of  his  property,  both  as  to  kind, 
situation,  and  value,  or,  in  other  words,  to  adopt 
the  method  known  by  the  name  of  listing .” 
And  yet  this  committee,  “ firm  in  belief,”  as 
they  say  they  were,  “ that  this  is  the  only  true 
and  certain  way,”  concluded,  nevertheless,  that 
they  had  not  better  act  up  to  their  convictions, 
but  say  that,  “ in  deference  to  the  strong  ob- 
jections made  to  the  public  inquisition  of  the 
listing  system  as  used  in  other  States,”  they 
“have,  while  adopting  its  machinery,  so  ar- 
ranged the  management  of  the  same  as  to  con- 
fine the  details  of  the  examination  to  the  knowl- 
edge of  the  assessor  and  the  party  alone ; ex- 
cept where,  for  the  furtherance  of  justice  and 
the  punishment  of  guilt,  it  is  necessary  that  the 
same  shall  be  made  public.”  From  the  fate 
which  subsequently  befell  the  committee’s  rec- 
ommendations, and  from  the  expression  of  sen- 
timent given  by  the  people  through  the  ballot 
at  a later  period,  it  is  evident,  however,  that  the 
instincts  of  the  committee  were  more  to  be  re- 
lied on  than  their  judgments. 

In  Connecticut  the  law  does  not  specifically 
require  that  persons  liable  to  taxation  shall  hand 
in  a list  of  their  property  and  make  oath  to  the 
correctness  of  the  same,  but  it  does  provide  that 
in  case  of  the  refusal  or  neglect  of  any  person 
so  to  do,  the  assessors  shall  make  out  the  list 
for  him,  according  to  the  best  of  their  informa- 
tion, and  then  add  ten  per  cent .,  in  addition  to 
the  valuation  thereof.  And,  from  the  list  thus 
made  out,  the  law  prohibits  the  board  of  relief 
from  making  any  abatement. 

In  Massachusetts  the  law  is  far  more  strin- 
gent, its  principal  provisions  being  as  follows : 

“Before  proceeding  to  make  an  assessment, 
the  assessor  shall  give  seasonable  notice  there- 


of to  the  inhabitants  of  their  respective  places, 
or  by  posting  up  in  their  city  or  town  one  or 
more  notifications  in  some  public  place  or  places, 
or  by  some  other  sufficient  manner.  Such  no- 
tic^  shall  require  the  inhabitants  to  bring  in  to 
the  assessors,  within  a time  therein  specified, 
true  lists  of  all  their  personal  estates  not  ex- 
empt from  taxation.” 

“The  assessors  shall  in  all  cases  require  a 
person  bringing  in  such  a list  to  make  oath  that 
the  same  is  true ; which  oath  may  be  admin- 
istered by  either  of  the  assessors.” 

“ When  the  assessors  of  a city  or  town  have 
given  notice  to  the  inhabitants  thereof  to  bring 
in  true  lists  of  all  their  polls  and  estates  not 
exempt  from  taxation,  in  accordance  with  the 
provisions  of  the  general  statutes,  they  shall  not 
afterward  abate  any  part  of  the  tax  assessed  on 
personal  estate  to  any  person  who  did  not  bring 
in  such  list  within  the  time  specified  therefor  in 
such  notice,  unless  such  tax  exceeds  by  more 
than  fifty  per  centum  the  amount  which  would 
have  been  assessed  to  that  person  on  personal 
estate,  if  he  had  seasonably  brought  in  said  list ; 
and  if  said  tax  exceeds  by  more  than  fifty  per 
centum  the  said  amount,  the  abatement  shall  be 
only  of  the  excess  above  the  said  fifty  per  cen- 
tum ; provided,  however,  that  this  act  shall  not 
affect  any  person  who  can  show  a reasonable  ex- 
cuse for  not  seasonably  bringing  in  said  list.” 

“Whoever  shall  deliver  or  disclose  to  any 
assessor  or  assistant  assessor  of  taxes,  elected  or 
appointed  in  pursuance  of  the  laws  of  this  com- 
monwealth, any  false  or  fraudulent  list,  return, 
or  schedule  of  property,  as  and  for  a true  list 
of  his  estates,  real  and  personal,  not  exempted 
from  taxation,  with  intent  thereby  to  avoid  the 
lawful  assessment  or  payment  of  any  tax,  or 
with  intent  thereby  to  defeat  or  evade  the  pro- 
visions of  law  in  relation  to  the  assessment  or 
payment  of  taxes,  shall  be  punished  by  a fine 
not  exceeding  one  thousand  dollars,  or  by  im- 
prisonment in  jail  not  exceeding  one  year.” 

Blank  schedules  or  lists  are  rarely  sent  by 
the  assessors  of  Massachusetts  to  the  tax-pay- 
ers ; but  in  Boston  the  practice  is  to  send  a 
small  circular,  which  states,  in  a compact  form, 
the  main  provisions  of  the  law,  the  time  when 
the  taxes  are  returnable  and  payable,  and  the 
further  item  of  information,  that  schedules  in 
blank  for  making  a list  of  personal  property  are 
obtainable  on  application.  The  information 
given  to  the  commission  is  to  the  effect,  that  in 
Boston  “the  citizen  prefers  to  be  let  alone  in 
this  matter  of  serving  blanks  or  lists,  and  to 
allow  the  assessors  to  estimate*  his  personal 
property,  so  long  as  he  is  not  called  on  to  pay 


* “The  assessors  shall  ascertain,  as  nearly  as  possi- 
ble, the  particulars  of  the  personal  estate  and  of  the 
real  estate  in  possession  or  occupation  as  owner  or 
otherwise,  of  any  person  who  has  not  brought  in  such 
list,  and  make  an  estimate  thereof  at  its  just  value, 
according  to  their  best  information  and  belief.  Such 
estimate  shall  be  entered  in  the  valuation,  and  shall 
be  conclusive  upon  persons  who  have  not  seasonably 
brought  in  lists  of  their  estates,  unless  they  can  show 
a reasonable  excuse  for  the  omission.”— Massachusetts 
Statutes. 


32 


LOCAL  TAXATION. 


too  high  a price  for  the  privilege.  When  the 
tax-payer  can  no  longer  afford  to  pay  the  cost 
of  the  luxury,  he  makes  his  appearance ; we 
get  our  list,  and  if  he  fails  for  two  or  three  years 
afterwards  to  answer  to  our  notification  to  file 
his  list  (unless  we  have  reason  to  think  he  ^ias 
changed  his  investments),  no  material  change 
would  be  made  in  his  valuation ; as  we  some- 
times say,  we  have  him  l’ated.” 

In  some  of  the  towns  of  Massachusetts,  the 
practice  is  adopted  of  publishing  annually  at 
the  expense  of,  and  under  the  authority  of  the 
town,  a complete  list  of  the  tax-payers,  with  a 
detailed  statement  of  every  item  of  real  and  per- 
sonal property  assessed  to  each  individual.  And 
yet  in  the  case  of  one  town,  in  which  particular 
inquiry  was  made,  the  resident  who  furnished 
a copy  of  such  minute  printed  statement  for  the 
past  year  accompanied  it  with  the  remark  that 
he  knew  from  direct  experience  that  personal 
property  was  returned  and  assessed  very  un- 
equally.* 

* As  an  illustration  of  the  minuteness  of  this  record 
and  expose  of  property,  the  commission  make  the  fol- 
lowing verbatim  extracts  from  the  list  of  a Massachu- 
setts town  for  the  past  year,  1S70 ; names  only  being 
suppressed  or  changed : 


John  Brown  & Co 

Stock  in  trade,  $6500 ; machinery,  $150  ; 
six  horses,  $600;  two  oxen,  $175  ; four 
wagons,  $200 ; 6hoe  - shop,  $1350  ; two 
saw-mills  and  privileges,  $4000 ; shop 
land,  one-eighth  acre,  $350  ; mill  land 
below  the  O.  road  and  around  the  mill, 
two  acres,  $40  ; land  under  and  around 
the  D pond,  fifteen  acres,  $100;  horse- 
. pond  land,  fifty-six  acres,  $150  ; Olm- 
stead  land,  ten  acres,  $250 ; Gilbert 
Wood  land,  twenty  acres,  $2100 ; wood 
on  Mead  land,  not  cut,  $700 ; Stoddard 
land,  fifteen  acres,  $700;  wood  on  G. 
H.  Wood  land,  not  cut,  $400 ; King 
land,  six  and  three-eighths  acres,  $650  ; 
Carruth  land,  five  and  five -eighths 
acres,  $1300 ; wood  on  J.  Moore’s  land, 
not  cut,  $200  ; wood  on  W.  F.  Downs’s 
land,  not  cut,  $500 ; wood  on  Forbs’s 

land,  $80 

Casey,  Alexander 

House,  unfinished,  $400 ; homestead, 

one-fifth  acre,  $100 

Holmes,  Norbert 

Swine,  $20 

Cain,  Patrick  (blind) 

House,  $500;  homestead,  one -eighth 
acre, $75. 

Campion,  Dennis 

Cow,  $35;  swine,  $10;  house,  $500; 

homestead,  one-quarter  acre,  $150 

Gilbert,  Hannah  W 

Two  shares  First  National  Bank,  Salem, 
$223;  one  share  National  Exchange 
Bank,  Salem,  $112;  half  house  (Wa- 
ters), $1500  ; half  house  lot  (Waters), 

one-quarter  acre,  $275 

Nichole,  Sally  A 

Cow,  $60;  house,  $450;  barn,  $100; 
(exempted),  $500  — $50  ; shop,  $50  ; 
homestead,  three-quarters  acre,  $175; 
Graves’s  land,  three  and  five -eighths 

acres,  $125 

Noon,  John 

Duncan  James 

Twenty  - one  horses,  $2500  ; fifteen 
three-year-olds,  $600  ; seven  buggies, 
$350 ; ' fifteen  top  carriages,  $1600;  five 
express  wagons,  Jenny  Lind,  two  horse 
carts,  and  four  lumber  wagons,  $600; 
large  sleigh  and  eighteen  single  sleighs, 
$800  ; twenty  - two  harnesses,  sixteen 
robes,  blankets  and  whips,  $500  ; house, 
$1900  ; barn  and  carriage-house,  $400  ; 
wood-house,  $100  ; barn  and  shed  (liv- 
ery), $1200  ; house  (Dewing),  $900; 
two  barns  (Dewing),  $1000  ; barn 
(Ayres),  $50 ; homestead,  one-quarter 
acre,  $1000 ; barn  lot  (livery),  one- 
quarter  acre,  $1500 ; Dewing  land, 
seventy-five  acres,  $3000  ; Ayres  land, 
ten  acres,  $500 


Total. 

| Polls.  I 

Tax. 

$291  03 

$20,495  00 

1 

9 80 

500  00 

'i 

2 98 

20  00 

8 17 

575  00 

‘i 

12*57 

695  00 

29  97 

2,110  00 

460  00 

’i 

2 70 

l 

265  40 

18,500  00 

Of  these  several  systems,  that  of  Massachu- 
setts is  unquestionably  the  best  in  theory  and 
the  most  efficient  in  practice,  and  if  New  York 
desires  such  a system,  it  admits  of  adaptation 
with  comparatively  little  labor.  But  the  com- 
missioners feel  themselves  debarred  from  rec- 
ommending the  adoption  of  any  such  system  for 
the  following  reasons  : 

1st.  A system  characterized  by  features  gen- 
erally analogous  to  the  system  of  Massachusetts 
and  Connecticut,  was  prepared  and  recommend- 
ed by  the  joint  committee  on  taxation,  in  1862 
and  1863  ; and  the  Legislature  to  whom  it  was 
presented,  and  all  subsequent  Legislatures,  have 
refused  to  consider  it. 

2d.  The  convention  assembled  in  pursuance 
to  law  in  1867-68,  to  form  a new  Constitution 
for  the  State  of  New  York  ; spent  much  time  in 
the  consideration  and  discussion  of  this  very 
subject,  and  finally  adopted  the  following  pro- 
vision, known  as  section  15  of  article  8,  relating 
to  the  finances  of  the  State  : 

“ Real  and  personal  property  shall  he  sub- 
ject to  a uniform  rule  of  assessment  and  taxa- 
tion.” 

On  the  subsequent  submission  of  the  Consti- 
tution to  the  people,  this  section,  by  direction 
of  the  Legislature  (act  of  April  24,  1869),  was 
voted  upon  separately  and  independently,  with 
apparently  a full  understanding,  from  the  de- 
bates of  the  convention  and  other  public  discus- 
sions, that  the  effect  of  its  ratification  would  be 
to  thereafter  disallow  indebtedness  to  offset  or 
diminish  the  valuation  of  any  description  of 
property  for  the  purposes  of  assessment  and  tax- 
ation ; a rule  which,  practically,  would  amount 
to  the  taxation  of  credits  or  indebtedness  the 
same  as  absolute  property.  The  result  was  that 
the  proposition  was  signally  disapproved,  the 
popular  vote  against  its  ratification  and  adop- 
tion being  273,260  in  a total  vote  of  457,211. 
And  it  is  a curious  circumstance  worthy  of  note, 
as  showing  the  extent  to  which  members  of  the 
convention  mistook  the  sentiment  of  the  people 
on  this  subject,  that  the  vote  of  the  districts  of 
several  of  the  delegates  who  confidently  and  ex- 
plicitly assured  the  convention  that  the  measure 
was  most  popular,  was  subsequently  either  very 
small  in  favor  or  altogether  adverse  to  its  ratifi- 
cation. An  analysis  of  the  vote  upon  this  ar- 
ticle also  shows  that,  while  the  majority  in  the 
counties  containing  the  large  cities  almost  uni- 
formly and  largely  voted  against  its  ratification, 
the  vote  of  a large  number  of  the  less  densely 
populated  or  agricultural  counties  was  also  in  the 
same  direction  ; as,  for  example,  the  counties  of 
Sullivan,  Oneida,  Fulton,  Hamilton,  Chemung, 
Clinton,  Columbia,  Delaware,  Dutchess,  Gene- 
see, Greene,  Herkimer,  Lewis,  Niagara,  Or- 
leans, Oswego,  Richmond,  Rockland,  Saratoga, 
Schoharie,  Schuyler,  Ulster,  Wayne,  Yates,  etc. 

In  view  of  these  circumstances,  therefore,  it 
would  seem  to  be  to  no  purpose,  even  if  it  were 
deemed  expedient,  for  the  commissioners  to  rec- 
ommend for  adoption  a system  which  the  Leg- 
islature and  the  people  of  New  York  have  so  re- 


LOCAL  TAXATION. 


83 


cently  and  so  unmistakably  indicated  that  they 
will  not  sanction. 

But  supposing  these  objections  to  be  removed, 
and  that  the  Legislature  and  the  people  were 
willing  to  reconsider  and  reverse  their  prior  de- 
terminations, the  more  important  question  yet 
remains  to  be  considered,  namely:  Will  the 
adoption  by  New  York  of  a system  of  taxation 
analogous  to  that  of  Massachusetts,  remedy  the 
inequalities  and  imperfections  now  existing  and 
complained  of,  and  in  the  end  prove  alike  expe- 
dient and  beneficial  to  the  State?  And  in  an- 
swer to  this,  the  commissioners  would  say,  that 
the  system  of  Massachusetts,  which  is  probably 
carried  out  more  efficiently  and  intelligently 
than  any  similar  system  in  any  other  State,  fails, 
according  to  the  acknowledgment  of  its  most  ex- 
perienced officials, to  obtain  in  the  city  of  Boston 
at  least  thirty  per  cent,  of  the  personal  property 
existing  within  the  city  limits  and  liable  to  tax- 
ation ; and  in  the  city  of  Dorchester,  where,  in 
common  with  the  rest  of  the  State,  it  may  be 
presumed  that  the  law  is  less  efficiently  exe- 
cuted than  in  Boston,  the  valuation  of  the  en- 
tire property  in  1809,  as  already  shown,  was 
nearly  thirty-three  per  cent,  below  the  standard 
as  established  in  Boston. 

In  Connecticut,  also,  as  has  been  before  stat- 
ed, the  amount  of  personal  property  that  escapes 
taxation  under  a similar  system  is  estimated  at 
forty  per  cent.  ; while  the  failure  of  the  system 
in  Cincinnati  and  Providence  is  unmistakably 
demonstrated  by  the  circumstance,  that  in  both 
of  these  cities  their  valuation-lists  of  personal 
property  are  known  to  fall  off  in  consecutive 
years  very  largely  (often  to  the  extent  of  mil- 
lions), while  the  aggregate  valuation  of  real 
property  continues  to  advance  uninterruptedly 
and  with  great  regularity.*  Now,  if  the  thirty , 
forty , or  larger  percentage  of  personal  property 
that  escapes  taxation  under  the  most  favorable 
circumstances  represented  a uniform  deduction 
from  the  value  of  all  property  of  such  character 
liable  to  assessment,  as  is  the  case  when  a per- 
centage of  the  value  of  real  estate  is  uniformly 
taken  as  the  standard  of  valuation,  there  would 
be  an  equality  of  assessment  of  any  one  man 
in  this  respect  as  compared  with  every  other 
(the  comparative  assessments  of  real  and  per- 
sonal property  not  being  taken  into  account). 
But  such  unfortunately  is  not,  and  never  can  be 
the  case  ; inasmuch  as  it  is  known  to  every  one 
who  has  ever  given  the  slightest  attention  to  the 
subject,  that  that  portion  of  personal  property 
which  always  escapes  taxation  is  the  one  which 
is  the  best  able  to  bear  it — as  capital  not  per- 
manently invested  but  used  for  speculative  pur- 
poses: negotiable  instruments,  national,  State 
and  other  bonds,  affording  either  by  stipulation 

* In  Cincinnati  the  valuation  of  personal  property 
fell  off  from  $63,412,000  in  186T  to  $01,583,000  in  1868, 
and  $5S,471,000  in  1869 ; while  the  valuation  of  real 
property  increased  during  the  same  time  from  $08,- 
569,000  in  186T  to  $09,799,000  in  186S,  and  $72,243,000  in 
1S69.  In  Providence,  R.  I.,  the  valuation  of  personal 
property  fluctuated  from  $43,618,000  in  1868  to  $42,162,- 
000  in  1869 ; while  the  valuation  of  realty  increased 
during  the  same  time  from  $49,107,000  to  $50, 90S, 400. 
C 


or  conditions  of  purchase  a high  rate  of  inter- 
est ; money  lent  on  collateral ; costly  personal 
effects,  plate,  jewelry,  furniture,  etc. ; while  the 
portion  that  never  escapes  taxation  is  that  whose 
exemption  would  most  conduce  to  the  interest 
of  the  State — as  machinery,  tools,  implements, 
ships,  canal-boats,  etc.,  the  cost  of  all  of  which, 
whenever  and  however  increased,  is  always  re- 
flected upon  the  cost  of  production ; or  mort- 
gages, the  taxation  of  which  almost  invariably 
tends  to  increase  the  rate  of  interest  to  those 
who  mainly  borrow  on  such  security  for  the  pur- 
pose of  building  or  otherwise  improving  real  es- 
tate. And  it  must  be  further  remembered  that 
as  the  requirements  of  the  State  for  revenue 
are  imperative  the  failure  of  any  portion  of  a 
given  description  of  property  to  meet  its  relative 
liabilities  necessarily  increases  the  burden  that 
must  be  imposed  upon  the  remainder. 

TAXATION  OP  INDEBTEDNESS. 

Again,  another  difficulty  which  presents  itself 
in  endeavoring  to  carry  out  a uniform  rule  of 
valuing  and  assessing  all  property,  both  real  and 
personal,  grows  out  of  the  question  of  indebted- 
ness, and  which,  as  before  stated,  was  the  real 
question  involved  in  the  fifteenth  section  of  the 
eighth  article  of  the  Constitution  of  1867-8,  re- 
jected by  the  people. 

In  Massachusetts  the  laws  do  not  allow  in- 
debtedness to  offset  or  diminish  the  amount  of 
tangible  property,  the  only  allowance  for  liabili- 
ties being  a provision  of  law  that  debts  du e from 
may  be  deducted  from,  or  offset,  debts  due  to 
the  person  to  be  taxed  (General  Statutes , chap. 
11,  sec.  4);  but  no  debts  are  allowed  to  offset 
or  decrease  actual  property  which  is  assessed  to 
the  holder  (except  consigned  goods),  even  al- 
though the  larger  part  or  the  whole  of  such 
property  is  purchased  upon  credit.  Thus,  to 
take  a particular  case  for  illustration  : A mer- 
chant in  , Boston  worth  $100,000  capital,  and 
goods  in  store  to  the  value  of  $500,000,  would  be 
assessed  upon  the  average  amount  of  goods  held 
during  the  year  preceding  the  first  day  of  May 
($500,000  if  he  was  replacing  goods  as  fast  as 
he  sold),  and  also  for  any  money  he  might  have 
on  hand  May  1st,  and  the  profits  made  during 
the  year  as  income.  (See  General  Statutes  of 
Massachusetts , chap.  11,  sec.  4.)  “But,”  to 
quote  from  the  communication  of  a Massachu- 
setts official  on  this  subject,  “as  Boston  construes 
that  section,  so  much  of  the  income  only  would 
be  taxable  as  was  withdrawn  from  business,  as 
in  taxing  his  business  we  should  assess  all  of 
his  profits  that  were  allowed  to  remain  there ; 
other  municipalities,  however,  construing  the 
law  differently,  would  tax  the  whole  profit  (in- 
come) less  $1000.  The  point  has  never  as  yet 
been  decided  by  the  courts  as  to  which  con- 
struction is  correct.” 

In  Connecticut  the  law  provides,  “that  the 
average  amount  of  goods  kept  on  hand  for  sale 
during  the  year  shall  be  the  rule  of  valuation 
and  taxation  ; but  merchants  shall  also  be  liable 
to  be  assessed  for  any  amount  of  credits  and  debts 


34 


LOCAL  TAXATION. 


due  them  from  responsible  persons  oyer  and 
above  their  liabilities.”  And  any  merchant 
may  have  a deduction  from  his  list  for  debts  ow- 
ing by  him  “to  residents  of  this  State  when  the 
debt  is  liable  to  be  assessed  and  set  in  the  list 
of  the  person  to  whom  the  same  is  due,  as  money 
at  interest.”* 

Now,  in  looking  at  these  provisions  of  the  tax 
systems  of  Massachusetts  and  Connecticut,  it 
would  seem  as  if  they  presented  indisputable 
evidence  upon  their  very  face  that  the  law  in 
respect  to  the  taxing  of  indebtedness  never  is, 
and,  from  the  very  necessity  of  the  case,  never 
can  be,  effectually  carried  out  and  enforced.  In 
proof  and  illustration  of  this,  let  us  apply  the  ex- 
ample, before  quoted  by  the  Massachusetts  offi- 
cials, of  the  merchant  with  $100,000  capital  and 
an  average  stock  of  $500,000  of  goods  bought 
upon  credit,  to  the  city  of  New  York.f  The  rate 
of  taxation  in  New  York  city  for  the  current  fis- 
cal year  being  2.27,  the  amount  which  the  mer- 
chant would  be  liable  to  pay  would  be  equiva- 
lent toll  3^-  per  cent,  upon  his  capital ; to  which, 
according  to  the  Boston  custom,  there  would  be 
further  added  a tax  at  the  rate  of  2.27  upon  all 
money  on  hand  on  the  day  of  assessment,  and 
also  upon  all  income  realized  from  business  dur- 
ing the  preceding  year.  If  the  business  was 
carried  on  in  the  city  of  Brooklyn,  the  aggre- 
gate percentage  levied  upon  the  capital  of  the 
merchant,  in  the  place  of  being  would  be 

19^;  in  Albany,  22.8;  in  Rochester,  33^. 
And  to  these  amounts,  if  we  would  know  the 
cost  of  the  capital  employed,  there  must  be  also 
added  the  rate  of  interest  which  the  capital  costs, 
or  is  worth  independently,  viz.,  seven  per  cent. 
And  again,  if  the  system  of  Massachusetts  was 
to  be  applied  equitably  in  New  York  (and  un- 
less it  is  so  applied  the  tax  assumes  the  char- 
acter of  a mere  arbitrary  exaction  or  confisca- 
tion), an  institution  like  the  Park  Bank,  in  the 
city  of  New  York,  with  a capital,  on  the  1st  of 
October,  1870,  of  $2,000,000,  and  money  and 
securities,  in  addition,  in  its  possession  (for  which 
it  is  indebted),  to  the  extent  of  $21,441,000 
would  be  taxed  upon  all  the  securities  it  holds, 
and  on  all  the  property  in  its  possession ; or,  not 
being  allowed  to  deduct  in  the  assessors’  valua- 
tion its  indebtedness,  would  be  practically  taxed 
2.27  on  $23,400,000,  or  at  the  rate  of  twenty- 
six  per  cent,  on  its  capital.  Now,  it  needs  no 
argument  to  show  that  no  business  in  any  loc-a- 


* The  provision  of  law  proposed  in  Illinois  on  this 
point  is  as  follows:  “In  making  up  the  amount  of 
moneys  and  credits  which  any  person  is  required  to 
list  for  himself,  he  shall  he  entitled  to  deduct  from  the 
gross  amount  of  moneys  and  credits  the  amount  of 
all  bona  fide  debts  owing  by  such  person  for  a consid- 
eration received;  but  no  acknowledgment  of  indebt- 
edness not  founded  on  actual  consideration,  believed 
when  received  to  have  been  adequate,  and  no  such  ac- 
knowledgment made  for  the  purpose  of  being  so  de- 
ducted shall  be  considered  a debt  within  the  meaning 
of  this  section." 

t In  the  debate  in  the  constitutional  convention  in 
New  York  on  this  subject,  in  1867-G8,  cases  were  cited 
by  a delegate  where  merchants  or  firms  in  New  York 
with  a capital  of  half  a million  were  constantly  carry- 
ing stocks  of  goods  or  securities,  promissory  notes, 
etc.,  to  the  extent  of  from  three  to  five  millions. 


tion  could  stand  such  an  onus  of  taxation  and 
survive  ; and  therefore  we  have  a right  to  infer 
that  although  such  a system  is  nominally  carried 
out  in  Massachusetts  and  Connecticut,  it  is  nev- 
ertheless in  some  way  rendered  practically  in- 
operative. 

The  above  examples  also  afford  a practical 
illustration  of  the  truth  of  that  economic  prin- 
ciple in  taxation,  that  the  productiveness  of  a 
tax  is  not  its  first  consideration  to  favor ; and 
that  the  benefit  which  accrues  from  an  amount 
of  revenue  specially  collected  may  fall  far  short 
of  compensation  for  the  blight  resulting  to  the 
State  from  the  manner  of  taking  it — a blight 
which  ruins  the  harvest  which  it  can  not  gather. 

But  it  may  be  said  that,  with  a uniform  and 
full  valuation  and  assessment  of  all  descriptions 
of  property,  such  rates  of  taxation  could  never 
occur.  In  answer  to  this  it  may  be  said  that 
in  Boston,  where  such  a system  nominally  pre- 
vails, the  rate  for  the  current  year  is  1.53; 
which,  in  the  case  of  the  merchant  above  re- 
ferred to,  would  tax  his  capital  to  the  extent  of 
7-nr  per  cent.  ; and  in  the  case  of  the  bank  to 
15-^j.  And,  furthermore,  under  this  system  of 
valuation  and  assessment  the  rate  of  tax  in 
Massachusetts  rises  not  unfrequently  to  two  per 
cent.,  and  sometimes  as  high  as  3.20,  3.33,  and 
3.89. 

And  yet  at  the  same  time  it  is  difficult  to  see 
how  a system  which  proposes  to  tax  all  personal 
property  uniformly  can  be  made  to  work  with 
any  degree  of  success,  unless  the  right  or  priv- 
ilege to  offset  or  diminish  valuation  by  indebted- 
ness is  strictly  and  explicitly  forbidden,  inas- 
much as  it  is  this  very  right  or  privilege  which 
furnishes  the  opportunity  whereby  personal  prop- 
erty can  most  successfully  evade  taxation.  Noth- 
ing is  more  easy  than  to  create  debts  for  the  pur- 
pose of  diminishing  valuation,  which  no  inves- 
tigation on  the  part  of  the  assessors  will  suffice 
to  prove  fictitious,  and  yet  of  such  a character 
that  individuals  of  easy  conscience  will  find  no 
difficulty  to  making  oath  to  their  validity.  In 
the  debate  which  took  place  on  this  subject  in 
the  constitutional  convention  of  1867-68,  nu- 
merous examples  were  given  by  delegates  of  ex- 
pedients of  this  character  which  had  fallen  un- 
der their  observation,*  and  the  chairman  of  the 

* In  the  country  and  in  the  towns  and  cities  in  the 
interior  of  the  State,  the  rule  is  almost  universal  for 
persons  to  get  up  an  indebtedness  of  some  kind  or 
other  so  that  their  property  may  escape  taxation. 
Some  persons  will  give  notes  to  their  children ; others 
will  exchange  notes  with  their  neighbors  ; and  others 
will  enter  into  obligations  for  the  purpose  of  creating 
a liability,  just  about  the  time  the  assessors  come 
around. — Hon.  Sanford  E.  Church , Debates  Constitutioyi- 
al  Convention , vol.  iii.,  page  1932. 

“ It  would  be  well  to  particularize  some  of  these  at- 
tempts to  get  rid  of  taxation.  Among  other  things, 
sir,  we  have  official  bonds  given  by  different  officers 
holding  places  of  trust  at  the  hands  of  the  people, 
either  locally  or  as  State  officers.  Such  officers  find 
no  difficulty,  in  the  positions  which  they  occupy,  in 
not  only  getting  a number  sufficient  for  their  purpose, 
but  in  absolutely  having  persons  ask  the  privilege  of 
getting  on  these  official  bonds ; and  then  these  persons, 
by  a sort  of  conscience  which  I do  not  understand, 
when  the  assessor  shall  come  around,  in  their  minds 
consider  this  a liability  which  they  may  possibly  be 
under  the  necessity  of  meeting  in  dollars  and  cents, 


LOCAL  TAXATION. 


35 


finance  committee  declared  “ that  in  the  country 
and  the  towns  and  cities  in  the  interior  of  the 
State , the  rule  is  almost  universal  for  persons  to 
get  up  an  indebtedness  of  some  kind  or  other , so 
that  their  property  may  escape  taxation .”  One 
of  the  most  common  and  successful  methods 
now  resorted  to  is  the  taking  of  an  unfair,  but 
apparently  strictly  legal,  advantage  of  the  law 
exempting  the  securities  of  the  United  States 
from  taxation.  Thus,  for  example,  an  individ- 
ual desiring  to  evade  taxation  on  capital  invest- 
ed in  general  mercantile  or  speculative  business, 
first  purchases  U.  S.  bonds,  we  may  suppose,  to 
the  amount  of  $100,000.  He  then  borrows  on 
his  promissory  note,  using  the  bonds  as  collater- 
al, $100,000,  or  some  smaller  sum,  and  invests 
the  money  so  obtained  in  the  business  in  ques- 
tion. When  the  day  of  assessment  comes  round, 
a return  is  made,  under  oath,  if  need  be,  of 
$100,000  business  capital;  $100,000  just  debts 
and  liabilities ; no  personal  property  subject  to 
taxation.  If  inquiry  is  made  further  respecting 
the  U.  S.  bonds  purchased,  the  answer  is  made 
legitimately,  that  in  respect  to  these  the  State 
authorities  have  no  jurisdiction.  Since  the  com- 
mencement of  the  present  year,  moreover,  a case 
involving  this  very  principle  of  exemption  has 
been  brought  before  the  Supreme  Court  of  New 
York  (general  term,  Jan.  3,  1871)  by  the  tax 
commissioners  of  the  city  of  New  York,  and  a 
decision  given  in  favor  of  its  legality  ;*  thus  il- 

and  thus  calming  their  consciences  in  regard  to  the 
matter— swearing  off  their  personal  liabilities  to  tax- 
ation. 

“ I will  take  another  case.  The  State  of  New  York, 
in  its  operations,  is  in  the  habit  of  receiving  large 
amounts  by  way  of  canal  tolls,  and  is  under  the  neces- 
sity of  making  the  deposits  in  the  locality  where  they 
are  received.  And  they  ordinarily  select  banks  of 
good  standing,  with  abundant  surplus  beyond  their 
capital.  But  under  the  rule  which  governs,  they  re- 
quire, in  addition  to  the  bonds  of  the  bank  itself,  in 
its  corporate  capacity,  the  bonds  of  individuals,  for  the 
purpose  of  securing  the  State  against  any  possible  loss 
or  deficit.  And,  sir,  you  will  find  very  many  of  the 
banks  in  the  interior,  where  the  entire  of  the  directors 
become  jointly  and  severally  holden  in  a specific  sum, 
by  way  of  penalty,  to  protect  the  State  from  any  loss 
that  might  be  occasioned.  And,  in  very  many  in- 
stances, I know  that  these  men,  each  of  them,  although 
the  bank  is  abundantly  good  and  able,  both  in  its  cap- 
ital and  in  its  assets  beyond  its  capital,  and  each  and 
every  one  of  the  individuals  is  able,  three  or  four  times 
over,  to  pay  the  amount  he  has  thus  become  quasi- 
security  for,  uses  that  as  one  of  the  items  of  their 
liability  to  reduce  their  taxation  upon  personal  prop- 
erty. I take  it  that  they  have  no  real  ground  of  law 
for  this  purpose ; but  they  acquit  their  conscience  in 
regard  to  the  matter,  and  get  rid  of  taxation  in  that 
way.  I know  a case  in  my  own  county  where  an  in- 
dividual, unquestionably  one  of  the  wealthiest  men  in 
the  county,  and  that  wealth  largely  consisting  of  per- 
sonal property  in  bonds  and  mortgages,  having  a large 
family  of  children  who  had  grown  up  to  years  of  dis- 
cretion, and  who  had  become  workers  in  the  world, 
who  kept  his  day-book  in  this  way : As  he  received 
money  from  A,  B,  and  C,  upon  mortgages,  he  first 
credited  to  the  parties  who  had  executed  the  mortgage, 
and  then  he  gave  credit  on  the  book  to  the  individual 
son  or  daughter,  from  time  to  time,  for  the  money  re- 
ceived from  that  mortgage  ; but  never,  in  any  one  in- 
stance, does  he  make  the  assignment  that  the  law  con- 
templated for  the  purpose  of  passing  the  mortgage ; 
and  never,  in  any  one  single  instance,  does  he  pay  over 
to  his  children  the  identical  moneys  thus  received. 
But  when  the  tax-gatherer  comes  around  he  has  no 
personal  property.’’— Hon.  Thomas  G.  Alvord,  Proceed- 
ings and  Debates , vol.  iii.,  pp.  1930,  ’7. 

* Supreme  Court  of  New  York,  Jan.  3, 1S71 — (Before 
presiding  Justice  Ingraham  and  Judges  Barnard  and 


lustrating  how  difficult  it  is,  holding  on  to  a 
system  of  universal  taxation,  to  once  exempt  any 
description  of  intangible,  incorporeal  property 
from  assessment,  without  at  the  same  time  open- 
ing a door  to  innumerable  opportunities  for 
fraud  and  evasion.  And  it  should  be  further 
borne  in  mind  that  this  door  has  been  most  ef- 
fectually opened,  both  by  national  and  State 
authorities,  and  that  it  is  now  entirely  beyond 
the  power  of  any  individual  State  to  close  it. 

Of  other  methods  by  which  U.  S.  bonds  or 
notes  are  made  available  for  the  purpose  of  evad- 
ing taxation,  the  following  may  be  also  men- 
tioned : Thus,  in  the  case  of  savings  banks,  it 
would  seem  most  reasonable,  if  any  moneyed 
capital  is  to  be  subject  to  taxation,  that  the  sur- 
plus of  such  institutions,  which  practically  is  “no- 
body’s property,  ” should  be ; especially  since  the 
deposits  in  any  savings  bank  which  are  due  to 
depositors  are  by  law  not  liable  to  taxation. 
Yet  in  1867  the  following  ingenious  law  was 
enacted : 

“ The  privileges  and  franchises  granted  by 
the  Legislature  of  this  State  to  savings  banks 
or  institutions  for  savings  are  hereby  declared 
to  be  personal  property,  and  liable  to  taxation 
as  such  in  the  town  or  ward  where  they  are  lo- 
cated to  an  amount  not  exceeding  the  gross  sum 
of  their  surplus  earned  ( after  deducting  the 
amount  of  such  surplus  invested  in  United  States 
securities ).”  It  seems  unnecessary  to  add  that 
after  this  the  amount  derived  from  the  taxation 
of  the  surplus  of  savings  banks  was  very  incon- 
siderable. 

The  commissioners  have  received  letters  from 
various  parts  of  the  State  pointing  out  instances 
of  inequalities  or  evasions  of  taxation,  as  in  the 
case  of  the  savings  banks  above  noticed,  and 
asking  that  remedial  measures  may  be  devised 
and  presented  to  the  Legislature.  As  an  illus- 
tration of  these  the  following  may  be  quoted : 

Cardozo) — Assessment  of  Personal  Property — The  Peo- 
ple ex  rel.  Benjamin  T.  Babbitt  vs.  The  Commissioners  of 
Taxes  and  Assessments  for  the  City  of  New  York , Re- 
spondents.—The  relator  iu  this  case  was,  in  April  last, 
assessed  by  the  commissioners  of  taxes  of  this  city  on 
his  personal  property  on  $250,000.  He  claims  that,  on 
the  1st  of  January,  1870,  his  personal  property  and  as- 
sets, other  than  certain  bonds  of  the  United  States 
Government,  amounted  in  the  aggregate  to  $345,895.97; 
and  that  his  debts  on  that  day  were  $356,084.49 ; that 
between  Jan.  1 and  April  1,  1870,  the  liabilities  and 
debts  of  the  petitioner  increased,  and  that  at  the  end 
of  April  the  excess  of  debts  over  his  assets  was 
greater  than  on  Jan.  1.  On  the  29th  of  April,  1870,  he 
addressed  to  the  respondents  a written  notice,  duly 
verified,  to  the  effect  that  he  was  not  liable  to  taxation  in 
any  amount  for  personal  estate,  and  requested  them 
to.  strike  his  name  from  the  assessment  rolls.  From 
this  statement,  it  appeared  the  relator  was  the  own- 
er of  $250,000,  commonly  known  as  five-twenties,  which 
had  been  purchased  by  him  in  the  years  1865, 1S66,  and 
1867,  for  permanent  investment,  which  bonds  he  claims 
are  by  law  exempt  from  taxation.  The  petitioner, 
therefore,  insisted  that  as  his  debts  exceeded  the 
amount  of  his  personal  property,  aside  from  the  bonds 
mentioned,  he  was  not  liable  to  be  assessed  or  taxed  in 
any  amount  for  personal  estate,  and  that  those  bonds 
could  not  be  taken  into  consideration  for  the  purposes 
of  taxation,  either  as  a part  of  his  capital,  or  for  the 
reduction  of  his  debts  and  liabilities.  The  respondent 
declined  to  accede  to  this,  but  gave  the  relator  notice 
that  they  had  reduced  his  assessment  to  $200,000. 
From  such  decision  an  appeal  was  taken  to  this  court, 
which  after  hearing  gave  judgment  in  favor  of  Mr. 
Babbitt.— Press  Report. 


3G 


LOCAL  TAXATION. 


“A.  B.  is  worth  over  $1,000,000.  He  is  what 
is  called  a ‘ banker.’  His  deposits  are  supposed 
to  be  not  less  than  $1,000,000  in  easy  times. 
For  many  years  he  has  discounted  no  paper  ex- 
cept the  city’s,  and  for  this  exceptional  favor 
he  has  the  city’s  deposits.  Instead  of  loaning 
money  to  help  business  here,  he  keeps  all,  save 
enough  money  to  pay  checks,  invested  in  gov- 
ernments. Then  he  states,  on  oath,  if  required, 
that  all  his  money  is  in  governments,  and  that 
the  few  hundred  thousands  in  his  vaults  belong 
to  depositors.  Thus,  last  year  he  paid  taxes 
on  less  than  one  twenty-fifth  part  of  the  real 
value  of  his  property.  I do  insist  that  such 
cases  should  be  reached,  and  I fearlessly  affirm 
that  the  oppression  occurring  from  fraud  and  of- 
ficial laxity  in  this  place  in  the  matter  of  taxa- 
tion, and  this  place  is  but  a (perhaps  bad)  sam- 
ple of  the  municipalities  of  the  State,  is  abun- 
dantly sufficient  to  justify  combined  and  forcible 
resistance  on  the  part  of  the  aggrieved.” 

Now  the  commissioners  have  given  the  above 
extract  from  one  of  the  numerous  letters  ad- 
dressed to  them,  omitting  names  and  places, 
although  not  so  requested  to  do,  because  they 
believe  that  in  the  discussion  of  questions  of 
this  character  the  attention  of  the  public  can  be 
more  certainly  secured  by  specific  and  actual 
illustrations  rather  than  by  abstract  reasoning. 
But  at  the  same  time,  after  examining  the  case 
referred  to  in  all  its  relations,  they  must,  while 
acknowledging  the  grievance,  frankly  say  they 
are  at  a loss  to  know  what  remedial  measures 
are  practicable.  The  bonds  and  the  notes  of 
the  United  States,  in  which  the  individual  in 
question  may  claim  that  his  capital  and  depos- 
its are  invested,  are  by  national  law  made  free 
from  taxation,  and  in  respect  to  this  the  State 
of  New  York  can  do  nothing;  while  the  at- 
tempt to  go  back  of  an  oath  and  investigate 
would  involve  such  an  amount  of  personal  in- 
quisition, litigation,  expense,  and  the  exercise 
of  arbitrary  power,  that,  although  practicable  in 
isolated  instances,  it  would  not,  as  a general 
thing,  be  tolerated  for  one  moment  by  the  pub- 
lic. 

Another  circumstance  which  does  not  seem 
to  have  generally  commanded  attention  is  the 
fact  that,  since  the  war  and  its  entailed  burden 
of  debt  and  taxation,  the  savings  banks  of  the 
country  have  in  a degree  changed  their  original 
character.  It  is  very  true  that  they  continue, 
as  before,  to  be  the  depositories  and  custodians 
of  the  savings  of  the  poor ; but  they  have  also, 
to  a very  great  extent,  become  the  depositories 
of  those  who  are  not  poor ; and  this  for  the 
purpose,  on  the  part  of  such  depositors,  of  escap- 
ing taxation.  Thus,  during  the  past  year,  a 
year  in  which  the  remunerations  of  industry 
have  been  notoriously  unsatisfactory;  a year 
of  falling  prices,  small  sales,  numerous  strikes, 
and  an  unusual  suspension  of  manufacturing 
operations  by  reason  of  an  unprecedented 
drought,  the  deposits  of  the  savings  banks  of  the  i 
country  have  been  in  excess  of  those  of  almost 
any  former  year— in  New  York  to  the  extent  of 


about  $40,000,000,  and  in  Massachusetts  to 
nearly  $24,000,000.  It  is  obvious,  therefore, 
on  the  very  face  of  this  statement,  to  use  the 
words  of  the  Governor  of  Massachusetts  in  his 
recent  message,  “ that  a large  share  of  this  in- 
crease is  not  the  savings  of  labor,”  and  that 
“each  year  shows  more  deposits  by  capitalists.” 

In  short,  the  recent  increase  of  the  deposits  in 
the  savings  banks  of  New  York  and  New  Eng- 
land does  not  constitute  proof,  as  is  often  aver- 
red, that  the  country  is  in  a highly  prosperous 
and  satisfactory  condition,  but  the  tendency  of 
its  showing  is  rather  the  other  way.  Formerly 
the  deposits  in  these  institutions  represented  in 
great  part  the  hard-earned  accumulations  of 
persons  who  were  entirely  dependent  for  sup- 
port upon  the  wages  received  for  the  perform- 
ance of  daily  routine  labor,  such  as  operatives 
in  factories,  day-laborers,  mechanics,  needle- 
women, clerks,  and  small  traders.  Now,  how- 
ever, in  consequence  of  the  exemption  of  these 
institutions  from  taxation,  or  their  subjection  to 
a reduced  rate,  they  are  made  use  of  by  a class 
of  persons  for  whom  savings  banks  were  never 
designed,  and  who  have,  in  fact,  no  moral  right 
to  avail  themselves  of  their  eleemosynary  char- 
acter ; and,  therefore,  the  single  fact  of  a recent 
rapid  accumulation  of  deposits  in  these  institu- 
tions “ does  not,”  to  quote  from  the  report  of 
the  bank  commissioners  of  Massachusetts(1867), 
“afford  any  evidence  that  they  are  performing 
the  beneficial  work  expected  of  them.”*  It  was 


* As  further  illustrations  of  the  correctness  of  this 
position,  an  instance  may  be  given  of  one  savings 
bank  in  Massachusetts,  which  having  some  years  ago 
but  about  $200,000  of  deposits,  was  taken  in  hand  by  a 
retired  capitalist,  anxious  to  develop  its  possibilities, 
and  in  the  short  space  of  three  years  carried  up  to  a 
capital  of  $700,000,  the  accumulation  being  all  drawn 
from  the  population  of  an  agricultural  district.  This 
result  was  accomplished  hy  a process  of  active  solici- 
tation, through  the  press  and  by  printed  circulars, 
calling  on  the  people  to  bring  in  their  money,  and 
promising  to  pay  seven  per  cent,  for  it,  free  of  taxes. 
The  whole  neighborhood  was  absolutely  drained; 
mortgages,  loan's  to  mechanics  and  small  manufac- 
turers were  called  in,  and  an  extreme  stringency  oc- 
curred in  the  local  money  market. 

In  the  year  1S68  the  statistics  of  the  savings  hanks 
of  the  manufacturing  city  of  Lawrence,  Mass.,  showed 
7508  depositors,  out  of  a population  of  28,000,  of  whom 
9000  were  operatives  directly  employed  in  the  mill. 
But  of  this  number  of  depositors  only  one-fourth  were 
operatives. 

The  report  of  the  Massachusetts  bureau  of  labor 
statistics  (March,  1S70,  pages  307-8),  makes  also  this 
statement  concerning  the  character  of  the  depositors 
in  that  State : 

“A  gentleman  whose  official  position  gives  him  a 
knowledge  in  the  premises,  which  entitles  what  he 
says  to  credit  beyond  question,  testifies  that  the  or- 
dinary depositors  in  savings  banks  (in  Massachusetts) 
are,  as  a general  rule,  from  the  lowest  class  of  labor- 
ers, and  are  mostly  Irish,  who  starve  themselves  that 
they  may  acquire.  The  better  educated  and  informed 
American  workmen  do  not,  and  can  not  save  ; because 
their  education,  their  manner  of  life,  their  home  re- 
quirements, their  sense  of  responsibility  to  wife  and 
child  and  home,  make  demands,  and  by  no  means  un- 
reasonable ones,  which  their  sense  of  duty  in  every 
relation  justify  them  in  meeting." 

Another  circumstance  which  has  recently  tended  ab- 
normally to  increase  the  capital  of  savings  banks  is 
the  dearness  of  real  estate,  and  of  such  stocks  as  were 
generally  within  the  reach  of  this  class  of  investors. 
Once  a few  hundred  dollars  would  purchase  for  a me- 
chanic or  laborer  a decent  house,  but  such  has  been 
the  increase  of  prices  resulting  from  a depreciated  cur- 
rency and  high  taxation,  that  a far  larger  sum  is  now 


LOCAL  TAXATION. 


37 


in  recognition  of  this  state  of  affairs  that  the 
Legislature  of  Massachusetts,  in  1808,  increased 
the  State  tax  on  savings  banks  from  one-half 
of  one  per  cent,  to  three-quarters  of  one  per 
cent.;  and  the  Governor  of  the  State,  in  his  re- 
cent message  (January,  1871),  suggests  that  this 
rate  be  even  further  increased. 

The  anomalous  character  of  the  deposits  of 
the  savings  banks  of  New  York  is  also  well  il- 
lustrated by  the  following  extract  from  a letter 
addressed  to  one  of  the  commissioners,  under 
date  of  Rochester,  Nov.  21,  1870  : 

“The  stocks  of  corporations  legally  taxable 
in  this  city  aggregate  over  $1,300,000.  The 
aggregate  assessment  of  ‘personal’  in  1869,  the 
latest  figures  in  my  possession,  was  $1,568,300. 
Assuming  that  these  stocks  were  (although  they, 
in  fact,  were  not)  assessed  according  to  law, 
there  would  remain  $268,300  as  the  taxable 
‘personal’  of  our  whole  population,  aside  from 
their  investments  in  local  stocks!  The  sav- 
ings bank  deposits,  January,  1869,  amounted 
to  $6,680,590.83 ; deduct  ‘personal  ’ (in  excess 
of  stocks)  assessed  1869,  $268,300,  and  we  have 
an  excess  of  $6,412,290.83  ‘ personal’ in  the 
single  form  of  savings  bank  deposits,  above  the 
aggregate  of  ‘ personal  ’ exclusive  of  stocks 
legally  subject  to  taxation  in  1869.  In  oth- 
er words,  these  deposits,  composed  of  money, 
amount  to  twenty-jive  times  the  amount  of  per- 
sonal assessed  in  excess  of  taxable  stocks.” 

“ In  view  of  these  and  similar  facts  which 
abound  in  all  moneyed  centres  where  savings 
banks  exist,  I respectfully  submit  that  these  in- 
stitutions should  cease  to  be  regarded  simply  as 
depositories  for  the  earnings  of  ‘ domestics,  day- 
laborers  in  the  country,  and  the  like ;’  and  be 
treated  rather  as  the  hiding-places  of  which 
capitalists  avail  themselves  in  order  to  escape 
from  taxation.” 

It  will  be  alike  appropriate  and  interesting 
for  the  commissioners  to  here  call  attention  to 
the  system  adopted  in  taxing  savings  banks  in 
the  State  of  Connecticut,  as  constituting  one  of 
the  curiosities  of  taxation  especially  worthy  of 
record.  The  State,  in  the  first  instance,  imposes 
a tax  of  three-fourths  of  one  per  cent,  on  the  whole 
amount  of  deposits  and  stock  in  such  institu- 
tions ; and  then,  in  consideration  of  this  and  all 
other  taxes  (i.  e.,  United  States  internal  revenue 
tax  of  one-fourth  of  one  per  cent,  on  dividends), 
the  banks  are  permitted  to  add  a compensatory 
amount  to  the  legal  rate  of  interest  on  all  their 
loans,  and  to  take  the  interest  in  advance ; the 
effect  of  which  is  to  throw  the  whole  amount  of 
taxation,  with  possibly  some  addition  for  profit, 
off  from  the  bank  on  to  the  borrower,  who  in 
most,  and  perhaps  a majority  of  cases,  is  a man 


required  to  purchase  a home,  and  when  it  is  obtained 
the  taxes  and  repairs  on  it  are  a heavy  burden.  Thus 
the  savings  bank  has  become  the  depository  of  funds 
waiting  for  the  return  of  better  times— of  iower  prices 
and  settled  values.  It  certainly  can  not  be  regarded  as 
a symptom  of  healthy  social  condition,  when  the  labor- 
ers of  the  country  are  in  this  manner  prevented  from 
acquiring  homes  for  their  families  and  an  established 
interest  in  the  country  and  its  prosperity. 


of  small  means,  who  borrows  for  a purpose  of 
local  development;  or,  in  other  words,  the 
whole  system  is  an  ingenious  plan  for  imposing 
a little  more  taxation  on  a class  which  the  State 
can  least  of  all  afford  to  tax,  and  that,  too,  not 
on  their  property,  but  upon  their  debts.  If  any 
more  ingenious  method  of  arresting  State  de- 
velopment has  been  devised,  the  commissioners 
have  not  been  able  to  discover  it ; and  as  a 
short  argument  for  an  opposite  policy,  they 
would  call  attention  to  the  following  sugges- 
tions of  the  Governor  of  Massachusetts  in  his 
last  annual  message,  which  suggestions,  it  may 
be  observed,  apply  equally  well  to  the  taxation 
of  mortgages  as  to  the  loans  of  savings  institu- 
tions : 

“It  is  for  the  public  welfare  that  every  man 
of  moderate  means  should  have  a homestead, 
and  every  inducement  should  be  held  out  to  him 
to  exert  himself  to  obtain  one ; but  it  is  dis- 
couraging for  him  to  find  that  he  can  not  effect 
a small  loan  without  being  compelled  to  pay  a 
rate  of  interest  which  will  absorb  a large  share 
of  his  surplus  earnings.” 

USE  AND  VALUE  OF  OATHS. 

It  is  customary  with  many  in  discussing  these 
subjects  to  propose  a renewed  requirement  of 
oaths,  and  an  increase  of  their  stringency  as  a 
remedy  for  the  difficulties  under  consideration ; 
but  the  commissioners  are  constrained  to  say, 
that  it  is  the  all  but  unanimous  opinion  of  offi- 
cials who  of  late  have  had  extensive  experience 
in  the  administration  of  both  the  national  anu 
State  revenue  laws,  that  oaths  as  a matter  of 
restraint,  or  as  a guarantee  of  truth  in  respect 
to  official  statements,  have,  in  a great  measure, 
ceased  to  be  effectual ; or,  in  other  words,  that 
perjury,  direct  or  constructive,  has  become  so 
common  as  to  almost  cease  to  occasion  notice. 
In  fact,  there  has  come  to  be  a feeling  in  the 
community  that  an  oath,  in  respect  to  matters 
in  which  the  Government  is  a party,  is  a mere 
matter  of  form,  of  mechanical  procedure,  and 
that  its  violation,  especially  with  a mental  res- 
ervation, and  when  the  interest  of  other  indi- 
viduals is  not  specifically  affected,  does  not  in 
itself  constitute  a crime.  The  fact  that  the  as- 
sessors of  the  State  of  New  York,  in  common 
with  those  of  the  other  States,  every  year  make 
oath  that  they  have  valued  all  property  for  as- 
sessment at  its  actual  value,  constitutes  one 
proof  of  the  truth  of  the  above  position ; the 
every-day  entry  of  goods  at  the  custom-house  at 
undervaluations  constitutes  another;  the  enor- 
mous frauds  committed  within  the  last  eight 
years  under  the  internal  revenue  laws  of  the 
United  States,  which  in  the  case  of  distilled 
spirits  alone  entailed  a loss  in  a single  year  of 
over  $130,000,000,  and  in  which  the  taking  of 
false  oaths  was  at  every  step  an  essential  feature, 
constitutes  a third ; while  of  individual  exam- 
ples detailed  by  assessors  to  the  commissioners, 
and  which  seem  to  have  been  retained  in  mem- 
ory only  through  some  peculiarity  of  audacity 
or  singularity  of  discovery,  the  record  would 


38 


LOCAL  TAXATION. 


be  almost  interminable.  A single  instance,  in 
which  the  facts  were  indisputable,  may  be,  how- 
ever, related.  In  one  of  the  cities  of  New  York, 
an  individual  of  prominence  and  standing  in 
the  community  was  assessed,  some  ten  years 
since,  for  personal  property,  to  the  extent  of 
$20,000.  The  first  year  of  such  assessment  he 
swore  down  the  valuation  to  $15,000 ; and  con- 
tinued thereafter  to  reduce  this  amount  an- 
nually, under  oath,  by  the  sum  of  $1000,  until 
the  year  1869,  when  he  acknowledged  personal 
property  to  the  extent  of  only  $1000.  That 
year  he  died ; and,  as  the  narrator  expressed  it, 
“passed  to  a tribunal  where  oaths  could  be  in- 
quired into.”  On  the  settlement  of  the  estate 
during  the  succeeding  year,  the  amount  of  per- 
sonal property  returned  by  the  surrogate  for 
division  among  the  heirs  was  in  excess  of 
$150,000. 

During  the  past  few  years,  the  low  tone  of 
commercial  morality  in  the  United  States  has 
been  a fact  generally  recognized  and  much  com- 
mented upon ; but  it  has  not,  that  we  are  aware 
of,  been  made  the  subject  of  inquiry,  by  those 
to  whom  the  guardianship  of  public  morals  is 
particularly  intrusted,  how  far  the  existing  sys- 
tem of  laws  relating  to  taxation  and  revenue, 
national  and  State,  are  justly  chargeable  with 
the  results  referred  to  ; or  how  much,  in  the  di- 
vision of  responsibility,  is  to  be  set  down  to  the 
account  of  those  who  violate  the  law,  and  how 
much  to  those  who,  forewarned  of  the  weakness 
of  human  nature,  deliberately  make  laws  which 
especially  lead  men  into  temptation. 

FRENCH  LEGISLATION  IN  RESPECT  TO  THE  TAX- 
ATION OF  PERSONAL  PROPERTY. 

It  is  well  known  that  one  of  the  principal 
causes  which  led  to  the  first  French  revolution 
was  the  inequality  and  multiplicity  of  taxes, 
and  especially  of  those  on  personal  property 
( fortune  mobiliere ) ; and  one  of  the  first  acts  of 
the  National  Assembly  of  1789  was  to  repeal 
all  inquisitorial  taxes  of  every  nature  and  char- 
acter. The  ground  which  was  substantially 
taken  by  the  committee  to  whom  this  subject 
was  subsequently  referred,  and  of  which  M.  de 
Fermon  was  the  chairman  ( rapporteur ),  and  La- 
rochefoucauld  and  the  Bishop  of  Autun  (Talley- 
rand) members,  being  as  follows  : 

1st.  That  a system  of  taxation  which  necessi- 
tated personal  and  arbitrary  inquisitions  for  its 
execution  was  inconsistent  with  the  mainte- 
nance of  “the  holy  law  of  the  liberty  of  the 
domicile.”  2d.  That  the  prescription  of  oaths 
in  cases  where  self-interest  tempted  the  citizen 
to  swear  falsely,  and  where,  from  the  very  na- 
ture of  the  case,  the  determination  of  the  exact 
truth  was  most  difficult,  was  in  itself  prejudicial 
to  the  morality  of  the  State.  The  national 
convention  of  France,  having  therefore,  as  al- 
ready stated,  repealed  all  laws  authorizing  in- 
quisition and  oaths  as  conditions  preliminary  to 
assessment  and  taxation,  substituted,  on  report 
of  their  committee,  in  the  place  of  direct  taxes 
on  personal  property,  a taxation  of  the  indicia , 


or  signs,  which  each  individual  may  present  of 
his  possession  of  such  property  ; and  further  rec- 
ognized the  rent,  or  rental  value  of  the  premises 
which  each  person  occupies  as  such  signs,  or  in- 
dicia. And  from  that  time  every  inhabitant  of 
France,  whether  citizen  or  foreigner,  has  paid, 
in  place  of  any  tax  on  his  personal  property,  a 
tax  on  his  rent  or  rental,  which  in  18G7-"8  was 
fixed  by  law  at  one-twentieth  part  of  the  rent 
paid  by  each  resident,  but  only  for  the  portion 
of  the  building  which  serves  as  a residence.  If 
the  individual  resides  in  his  own  house,  he  pays 
the  amount  which  would  be  payable  if  the  apart- 
ment he  occupies  were  let  to  a tenant.* 

ALEXANDER  HAMILTON’S  VIEWS  IN  RESPECT 
TO  TAXATION. 

It  is  not  generally  known,  furthermore,  that 
Alexander  Hamilton,  as  a member  of  the  con- 
ventions which  framed  the  Constitution  of  the 
United  States,  and  the  first  Constitution  of 
New  York,  gave  all  his  influence  in  favor  of  the 
restriction  of  all  internal  or  local  taxation  to 
visible,  tangible  objects,  and  to  the  assessment 
of  these  specifically  and  by  some  uniform  and 
simple  rule.  The  language  used  by  him  in  one 
of  his  papers  (the  Constitutionalist),  on  this  sub- 
ject, is  as  follows  : “ The  genius  of  liberty  rep- 
robates every  thing  arbitrary  or  discretionary  in 
taxation.  It  exacts  that  every  man,  by  a defi- 
nite and  general  rule,  should  know  what  pro- 
portion of  his  property  the  State  demands. 
Whatever  liberty  we  may  boast  in  theory,  it 
can  not  exist  in  fact  while  (arbitrary)  assess- 
ments continue.” 

TAXATION  OF  MORTGAGES. 

We  come  next  to  the  consideration  of  the 
taxation  of  mortgages.  A universal  and  uni- 
form system  of  taxation,  according  to  the  popu- 
lar acceptation,  would  of  necessity  require  that 
mortgages  of  real  estate  should  be  taxed  in 
common  with  and  at  the  same  rate  as  all  other 
securities  and  property ; and  under  the  tax  sys- 
tems of  New  York,  Massachusetts,  Connecticut, 
and  most  of  the  other  States,  they  are  so  taxed. 
During  the  sessions  of  the  Constitutional  Con- 
vention of  New  York  in  1867-68,  and  in  re- 
ports of  the  recent  commissions  for  revising  the 
taxation  of  the  different  States,  and  elsewhere, 
there  has  been  much  discussion  in  respect  to 
the  questions  whether,  in  estimating  for  assess- 
ment the  valuation  of  real  estate  encumbered 
with  a mortgage,  the  amount  of  the  mortgage 
should  be  deducted  from  the  valuation,  on  the 
assumption  that  an  individual  should  be  taxed 
on  what  he  owns,  and  not  on  what  he  owes  ; or, 
if  the  deduction  be  not  allowed,  whether  the  mort- 
gage itself  should  be  also  taxed  as  personal 


* As  stated,  this  tax  is  paid  by  every  inhabitant  not 
reported  indigent;  but  in  many  towns  and  cities,  and 
in  Paris  in  particular,  the  municipal  council,  in  order 
to  aid  the  poorer  classes,  or  those  paying  rents  below 
a certain  sum,  by  a sort  of  contract  with  the  Imperial 
Government  were  in  the  habit  of  compoundin'?  for  the 
tax  by  paying  a certain  tixed  sum  in  place  from  the 
municipal  revenues. 


LOCAL  TAXATION. 


39 


property,  the  advocates  of  exemption  of  the  lat- 
ter averring  that  by  so  taxing  the  same  proper- 
ty would  be  in  fact  subjected  to  double  taxa- 
tion. 

In  the  Constitutional  Convention  the  weight 
of  opinion  seemed  to  be  that  if  the  present  prac- 
tice of  allowing  indebtedness  to  offset  the  valu- 
ation of  personal  property  was  to  be  recognized, 
the  deduction  of  the  value  of  mortgages  from 
the  value  of  the  real  estate  should  also  be  al- 
lowed; or,  in  other  words,  that  there  should 
be  a uniform  rule  of  valuing  and  assessing  all 
property.  And  the  Convention  so  reported ; 
but  the  proposition,  as  already  stated,  was  re- 
jected when  submitted  to  the  people  for  ratifi- 
cation. 

The  New  York  commission  of  1862-’G3,  for 
the  revision  of  taxes,  reported  a law  to  the  ef- 
fect, “ that  the  net  value  only  of  every  person’s 
taxable  estate,  whether  invested  in  land  or  in 
any  other  species  of  property,”  should  be  taxed ; 
and  that  the  taxes  levied  on  mortgaged  real 
estate  should  be  proportionably  assessed  on  the 
land  and  on  the  possessor  of  the  mortgage, 
and  that  the  mortgage  thus  assessed  should  not 
be  otherwise  taxed.  The  commissioners  of 
New  Jersey  and  Connecticut,  on  the  other  hand, 
came  to  an  exactly  opposite  conclusion,  and  rec- 
ommended that  both  the  land  and  the  mort- 
gage be  taxed  on  their  full  valuation,  holding 
that  the  twro  are  independent  property,  and  that 
the  taxation  of  both  would  not  be,  therefore, 
double  taxation.* 

On  this  subject,  further,  the  writers  on  taxa- 
tion and  political  economy  in  Europe  never 


* The  opinion  of  the  New  Jersey  commission,  of 
which  the  State  chancellor  was  a member,  is  express- 
ed as  follows : 

“Taxes  on  property  are  defined  to  be  the  tribute 
which  that  property  owes  to  the  State,  for  the  protec- 
tion, security,  and  consequent  value  it  receives  from 
the  government  of  the  State.  The  protection  so  re- 
ceived is  commensurate  luith  the  •property  held , and  not 
with  the  sum,  or  balance,  the  holder  may  be  found  to 
be  worth.  If  the  owner  of  land  be  indebted  to  his 
creditor  for  the  value  of  the  land,  and  this  indebted- 
ness be  represented  by  note  or  bond,  the  land  is  one 
property,  and  the  note  or  bond  another.  Each  is  pro- 
tected by  the  law,  and  each  owes  its  tribute  to  the  law. 
They  are  in  no  sense  the  same,  different  in  their  na- 
tures, their  titles,  and  the  uses  to  which  they  may  be 
put.  Each  may  be  sold  and  transferred  by  the  hold- 
er, without  regard  to  the  other ; nor  does  the  note 
necessarily  represent,  or  depend  for  its  value  on  the 
land.  It  may  be  paid  by  other  means  and  other  prop- 
erty— by  the  industry,  the  labor,  or  the  future  services 
of  the  maker.  For  all  other  purposes  the  note  and 
the  land  are  regarded  by  the  law,  and  are  treated,  in 
fact,  as  distinct  and  valuable  things.  Why  should  they 
not  be  treated  as  such  in  the  laying  of  taxes  ? The 
credit  is  given,  and  the  note,  or  bond,  or  mortgage  is 
made,  because  the  convenience  and  advantage  both 
of  buyer  and  seller  are  thereby  subserved.  The  buy- 
er prefers  the  one  property,  the  seller  the  other.  Tax- 
ing each  property  once  is  not  double  taxation .” 

The  Connecticut  commission,  quoting  the  above 
opinion,  adds  : 

“ We  hold  these  views  to  be  sound,  and  that  all 
property  under  the  full  shelter  of  the  law  should  pay 
tribute  for  that  shelter,  according  to  its  protected  val- 
ue, without  regard  to  any  questions  of  indebtedness  or 
securities  incidentally  growing  out  of  it.  These  ques- 
tions of  indebtedness,  erroneous  in  principle,  and  of- 
fering motives  for  the  creation  of  fictitious  debts  for 
offset,  have  ever  been,  and  must  ever  continue  to  be,  a 
prolific  source  of  dispute  and  vexation  in  their  adjust- 
ment, and  continually  calling  for  legislative  changes.” 


touch,  for  the  reason  that  none  of  them  accept 
the  idea  of  the  feasibility  or  expediency  of  tax- 
ing any  personal  property  whatever  directly; 
but  in  the  United  States  it  has  been  discussed 
at  some  length  by  at  least  one  authority  in  po- 
litical economy  (Hon.  Amasa  Walker,  “ Science 
of  Wealth,”  pp.  338,  339),  who  holds  to  the  the- 
oretic view  that  it  would  not  be  in  opposition 
to  the  principles  of  political  economy,  and  not 
inequitable,  to  tax  alike  botli  the  land  and  the 
mortgage,  and  in  not  allowing  an  abatement  in 
the  valuation  of  the  former  on  account  of  the 
latter.* 

But  whatever  may  be  the  theoretic  view  of 
this  question,  there  is  one  safe  rule  or  test  which 
may  be  relied  on  for  guidance,  and  that  is  the 
rule  or  test  of  experience.  And  all  experience 
shows  that  in  a country  like  the  United  States, 
where  land  is  relatively  abundant  and  cheap, 
and  moneyed  capital  scarce  and  dear,  whatever 
interposes  between  or  obstructs  the  connection 
of  capital  and  land  works  to  the  detriment  of, 
and  retards  the  development  of  the  State.  Let 
us  reason  about  this  matter. 

The  land-owner  desires  the  use  of  capital  in 
order  to  improve  his  property ; it  may  be  to 


* Mr.  Walker’s  reasoning  on  this  subject  is  as  fol- 
lows : “ It  has  been  sometimes  mentioned  that  cred- 
its ought  not  to  be  taxed,  but  all  assessments  be  made 
upon  values  or  property,  personal  or  real.  Taxes,  it 
has  been  argued,  ought  not  to  be  laid  upon  persons, 
but  upon  that  out  of  which  they  can  alone  be  paid, 
viz.,  property. 

“ But  credits  are  taxed  as  well  as  values.  A holds 
a farm  worth  $10,000,  mortgaged  to  B for  $5000.  A 
pays  taxes  upon  the  whole  valuation,  and  B upon 
$5000,  as  money  at  interest.  A is  said  to  be  doubly 
taxed. 

“ This  is  a practical  question  that  has  puzzled  leg- 
islators in  every  age  and  country.  Let  us,  therefore, 
carefully  examine  it. 

“ Suppose  A and  B aforesaid  form  an  entire  com- 
munity, and  that  the  whole  tax  of  $150  is  imposed  on 
property.  The  whole  valuation  will  then  be  $10,000 
(A’s  farm),  and  the  rate  one  and  a half  per  cent.,  which 
A pays,  and  B goes  untaxed.  We  will  now  change 
the  principle,  and  have  both  property  and  credits  tax- 
ed. The  valuation  will  then  be : A’s  farm,  $10,000,  and 
B’s  money,  at  interest,  $5000 ; total,  $15,000 ; and,  with 
the  same  amount  to  be  assessed  ($150)  the  rate  will  be 
one  per  cent.,  of  which  A pays  $100  and  B $50.  So, 
then,  we  discover  that  A is  not  doubly  taxed,  as  as- 
sumed, but,  at  the  worst,  pays  only  $50,  or  one-third, 
more  than  his  share.  Such  must,  in  principle,  be  the 
result  of  this  kind  of  taxation,  taking  a whole  com- 
munity together.  All  the  amount  taxed  upon  credit 
is  so  much  relief  to  taxation  upon  property.  This 
seems  to  be  clear;  and  the  justice  of  this  is  establish- 
ed by  the  fact  that  A bought  his  farm  knowing  that 
it  would  be  subject  to  a full  taxation,  and  bought  it 
cheaper  on  that  account.  B,  on  the  other  hand,  ac- 
cepted his  mortgage  on  the  same  ground,  knowing  it 
would  be  subject  to  tax  on  the  common  valuation.  Is 
either  party,  then,  wronged  ? 

“ But  perhaps  another  reason  may  be  given  why  A 
should  pay  taxes  on  the  whole  value  of  his  farm,  viz., 
that,  having  the  usufruct  of  the  whole,  he  is  entitled  to 
all  the  profits  on  the  farm.  * But  he  don’t  own  the 
whole  of  the  farm.’  True,  that  is  his  misfortune  ; if 
he  did,  he  would  obtain  a larger  amount  of  net  prof- 
its; but  his  obligation  to  pay  tax  on  the  whole  is  not 
impaired,  because  he  has  the  use  of  a part  of  B’s  capi- 
tal. As  owner  of  the  farm,  A has  a chance  for  all  the 
profits  that  can  be  made  from  the  whole  ; while  by  the 
taxation  of  B on  the  mortgage  the  former  saves  a part 
of  what  he  would  otherwise  pay  in  taxes.  One  pays 
taxes  for  the  profit  of  business— the  other  for  the  in- 
come on  his  capital. 

“ That  much  hardship  may  often  result  from  taxing 
credits  as  well  as  property,  is  undoubtedly  true  ; but 
that  only  affords  evidence  that  the  income  tax  princi- 
ple is  the  correct  one.” — Science  of  Wealth , pp.  338, 339. 


40 


LOCAL  TAXATION. 


drain  it,  fence  it,  build  on  it,  or  otherwise  im- 
prove. It  is  especially  for  the  interest  of  the 
State  that  this  should  be  done : to  increase  the 
area  and  amount  of  its  crops  ; to  provide  com- 
fortable and  abundant  homes  for  its  citizens  and 
working-classes ; to  attract  population  ; and,  to 
speak  plainly,  increase  the  value  and  amount  of 
real,  tangible  property,  such  as  shall  serve  as  a 
basis  of,  and  not  evade,  taxation.  But  the  cap- 
italist is  entitled  to  and  will  have  the  legal  rate 
of  interest  on  his  money ; and  abundant  oppor- 
tunities are  afforded  him  for  obtaining  that,  and 
even  more ; as  by  investing  in  national,  State 
and  railroad  bonds,  exempt  by  law  from  tax- 
ation, or  sold  at  a discount  sufficient  to  compen- 
sate for  taxation  ; or  in  bonds  and  mortgages  on 
real  estate  in  New  Jersey  and  Pennsylvania,  or 
in  many  of  the  Western  States  and  cities,  or  in 
Connecticut,  where  the  statute  allows  the  lend- 
er of  money  on  mortgage  to  add  to  the  legal 
rate  of  interest  the  rate  of  taxation,  and  also 
the  premium  for  insurance ; or  in  ground-rents, 
a condition  of  which  may  be  that  the  taxes  are 
to  be  paid  by  the  occupier. 

On  the  other  hand,  the  State  of  New  York, 
by  taxing  mortgages,  virtually  says  to  the  lend- 
er of  money  on  these  securities,  “ You  shall  not 
liave  in  return  the  legal  rate  of  interest for 
the  mortgage,  being  a matter  of  record,  can  not 
be  concealed,  and  accordingly,  by  requirement 
of  law,  is  usually  taxed  at  its  full  valuation. 
But  it  is  obvious,  if  it  is  so  taxed,  that  the  in- 
vestor generally  will  receive  not  only  less  than 
the  legal  rate  of  interest,  but  less  than  would  be 
afforded  by  an  investment  of  his  money  in  al- 
most any  other  security.  Nay  more,  there 
have  been  instances  in  New  York  in  which  the 
holder  of  a mortgage,  if  taxed  according  to  law, 
would  lose  not  only  his  entire  interest,  but 
would  further  be  obliged  to  pay  a sum  addition- 
al for  the  privilege,  as  it  were,  of  holding  such 
an  investment.  Thus,  for  example,  a mort- 
gage in  New  York  city  can  not  to-day,  without 
a violation  of  the  usury  laws,  or  a dereliction 
of  duty  on  the  part  of  the  assessors,  or  except 
purchased  at  a discount,  yield  over  4^  inter- 
est ; in  Brooklyn,  3^  ; in  Albany,  2^,  ; and  in 
Rochester,  but  three-tenths  of  one  per  cent. ; and 
as  the  rate  of  taxation  in  the  latter  city  in  for- 
mer years  has  been  in  excess  of  seven  per  cent., 
it  is  clear  that  money  loaned  on  real  estate 
mortgages  in  that  locality  must  have  theoret- 
ically paid  more  in  taxes  than  it  received  in  in- 
terest. 

In  reviewing  these  facts,  the  question  natu- 
rally suggests  itself,  how  long  can  a people  so 
eminently  practical  as  the  Americans  tolerate 
such  absurdities  ? And  how  long  is  it  to  be  ex- 
pected that  the  gifts  of  God,  in  the  way  of  natu- 
ral resources,  will  continue  to  supplement  the 
absence  of  sense  and  discretion  in  the  business 
of  legislation  ? 

The  result  which  has  taken  place  in  New 
York  is  exactly  what  might  have  been  legiti- 
mately expected.  Capital  which  formerly  found 
its  way  into  real  estate  mortgages  is  now  di- 


rected into  other  channels,  and  to  such  an  ex- 
tent that,  were  it  not  for  the  provisions  of  law 
which  exempt  the  mortgage  investments  of  sav- 
ings banks  and  life  insurance  companies  from, 
taxation,  and  compel  these  institutions  to  invest 
a part  of  their  capital  in  such  securities,  money 
could  now  hardly  be  obtained  in  New  York  for 
the  improvement  of  real  estate  on  pledge  of  the 
property.  Again,  it  was  formerly  a very  gen- 
eral custom  to  embody  in  wills  a provision  that 
property  bequeathed,  or  to  be  held  in  trust,  should 
be  invested  in  mortgages ; but  this  custom,  the 
commissioners  are  informed,  is  now  almost  en- 
tirely done  away  with,  while  executors  and  trus- 
tees are  continually  importuned  by  legatees  to 
change  the  character  of  such  investments  on  the 
ground  that  they  no  longer  continue  to  afford  a 
fair  interest.  In  one  instance,  the  commission- 
ers were  frankly  informed  by  a board  of  assess- 
ors that  their  feelings  as  men  would  not  allow 
them  to  assess  mortgages  according  to  the  strict 
provisions  of  the  law,  when  they  knew  that  by 
so  doing  they  would  deprive  widows  and  or- 
phans of  almost  their  entire  income.  In  an- 
other instance  it  was  pleaded  that  the  interests 
of  a city  would  not  allow  its  assessors  to  tax  its 
local  mortgages,  inasmuch  as  so  doing  M ould  in- 
evitably restrict  growth,  and  that  a certain  an- 
nual growth  or  land  improvement  was  absolute- 
ly essential  in  order  to  prevent  the  rate  of  taxa- 
tion, by  reason  of  annually  increasing  expendi- 
tures, from  becoming  unbearable. 

The  legislation  and  experience  of  the  State 
of  Connecticut  on  this  question  are  also  Mrorthy 
of  notice.  This  State  (act  of  I860)  taxed  mort- 
gages at  their  full  valuation,  the  same  as  other 
personal  property ; but  provided  that,  as  be- 
tween residents  of  the  State,  indebtedness  might 
be  deducted  from  valuation,  when,  at  the  in- 
stance of  the  debtor,  the  debt  could  be  trans- 
ferred for  taxation  to  the  list  of  the  assets  of  the 
creditor.  Subsequently  (1862),  finding  probably 
that  this  last  provision  did  not  facilitate  the  loan 
of  money  on  mortgage,  an  additional  law  was 
enacted  which  reads  as  follows  : 

11  Net  contract  shall  he  deemed  usurious  hy  rea- 
son of  the  borrower's  paying , or  agreeing  to  payy 
the  taxes  assessed  and  paid  on  the  sum  loaned , or 
the  insurance  upon  the  estate  mortgaged  to  secure 
the  same  the  practical  effect  of  which  is  most 
obviously  to  throw  the  whole  onus  of  the  taxa- 
tion on  to  the  debtor,  and  entirely  exempt  the 
creditor ; or,  comparing  the  legislation  of  New 
York  and  Connecticut,  the  former  virtually  says 
to  the  real  estate  owner,  “ you  shall  not  borrow 
at  all  on  the  security  of  your  property  for  its 
development;”  while  the  latter  accords  permis- 
sion to  borrow  on  condition  that  a rate  of  inter- 
est, coupled  with  the  most  perfect  security,  is 
paid  at  least  (in  the  cities)  tMro  per  cent,  great- 
er than  the  legal  rate,  and  greater  than  is  taken 
for  the  loan  of  money  under  almost  any  other 
conditions. 

On  the  other  hand,  New  Jersey  and  Pennsyl- 
vania, with  a wiser  experience,  have,  as  before 
shown,  entirely  exempted  mortgages  from  taxa- 


41 


LOCAL  TA 

tioti  over  a large  part  of  their  territory,  and  will,  ] 
undoubtedly,  at  no  distant  day  make  the  ex- 
emption universal.  And  here  occur  points  to 
which  special  attention  should  be  given,  viz. : 
In  both  of  these  States,  it  is  represented  to  the 
commissioners  that  the  demand  for  this  ex- 
emption came  not  in  any  degree  from  the  capi- 
talists, but  from  the  small  land-holders,  particu- 
larly those  of  the  working-classes  ; and  further, 
that  the  influence  of  the  exemption  has  been 
most  beneficial  to  the  districts  affected  by  it,  so 
much  so,  to  use  the  words  of  one  conversant 
with  the  question,  “ that  if  it  were  possible  to 
take  in,  as  from  an  eminence,  a view  of  the 
whole  State,  the  counties  in  which  mortgages 
were  exempt  from  taxation  would  be  as  readily 
distinguished  from  the  others  as  would  be  a 
field  of  luxuriant  wheat  or  corn  from  a field 
of  scrub-oak  or  brush-wood.” 

It  should  be  also  here  stated  that,  apart  from 
any  desire  for  a general  revision  and  reform  of 
the  tax  laws  of  the  State,  the  evils  resulting 
from  the  present  system  of  taxing  mortgages 
have  already  compelled  the  attention  of  an  .in- 
fluential portion  of  the  people  of  the  State ; 
who,  in  turn,  have  memorialized  the  Legisla- 
ture on  the  subject.  In  particular,  the  Cham- 
ber of  Commerce  of  New  York,  on  the  20th  of 
February,  1870,  in  accordance  with  the  report 
of  a special  committee  appointed  to  examine 
the  subject,  petitioned  the  Legislature  to  pass 
a uniform  law,  “ exempting  from  taxation  all 
bonds  and  mortgages  and  liens  on  real  estate, 
when  the  real  estate  has  been  taxed  at  its  full 
assessed  value  and,  in  accordance  with  the 


* The  following  is  a copy  of  the  petition  of  the  New 
York  Chamber  of  Commerce,  above  referred  to: 

The  Chamber  of  Commerce  of  the  State  of  New  York 
respectfully  petition  your  honorable  bodies  to  enact  a 
law  uniform  in  its  applications  throughout  the  State, 
exempting  from  taxation  all  bonds  and  mortgages, 
and  liens  on  real  estate  when  the  real  estate  has  been 
taxed  at  its  full  assessed  value,  for  the  following  rea- 
sons: 

1st.  The  property  having  been  once  assessed,  can 
not  be  justly  taxed  a second  time. 

2d.  The  present  mode  of  taxing  real  estate  in  the 
first  instance  for  its  assessed  value,  and  afterwards  the 
debt  created  by  the  mortgagor  as  a lien  on  the  same 
for  the  money  borrowed  and  used  by  him  in  the  pur- 
chase and  improvement  of  the  real  estate  already  pay- 
ing its  fair  proportion  of  the  expenses  of  State  or  mu- 
nicipal government,  is  unfair  and  unjust,  because  one 
kind  of  property  is  thus  compelled  to  pay  a greater 
tax  than  another  kind  of  equal  value. 

3d.  It  is  unfair  to  the  development  of  the  real  and 
material  interest  of  this  State,  because  it  holds  out 
strong  inducements  to  capitalists  to  invest  their  sur- 
plus means,  either  in  United  States  bonds,  which  are 
entirely  exempted  from  tax  by  federal  laws,  or  in  rail- 
road bonds,  State  bonds,  or  on  mortgages  on  property 
in  other  States,  which  are  exempted  by  their  local  laws 
from  taxation. 

4th.  It  cripples  enterprise ; prevents  the  mechanic 
from  obtaining  full  and  profitable  employment,  in 
consequence  of  the  difficulty  experienced  by  persons 
of  limited  means  in  borrowing  from  capitalists,  who 
refuse  to  lend  on  mortgage,  because  they  are  at  once 
taxed  on  the  amount,  whenever,  for  their  own  securi- 
ty, they  have  placed  it  on  record  in  the  office  of  the 
county  clerk ; and  besides  this,  the  present  law  dis- 
criminates against  persons  residents  of  this  State.  If 
they  loan  money  on  bond  and  mortgage  they  are  tax- 
ed upon  the  amount,  while  a resident  of  a neighbor- 
ing State  can  lend  money  on  the  same  property  and 
entirely  escape  taxation  in  this  State. 

And  last,  this  taxation  is  really  borne  by  the  debtor 


prayer  of  this  and  other  petitions,  a bill,  of 
which  the  following  is  a copy,  was  introduced 
into  the  Assembly  at  its  last  session,  but  failed 
to  receive  consideration : 

Sec.  1.  All  money  now  and  hereafter  to  be  loaned, 
secured  by  a mortgage  upon  lands  in  the  State  of  New 
York,  is  hereby  exempted  from  taxation. 

Seo.  2.  This  act  shall  take  effect  immediately. 

But,  notwithstanding  this  failure  of  consid- 
eration, the  commissioners  are  of  opinion  that, 
whatever  else  may  be  acceded  to  in  the  way  of 
reform  in  the  existing  system  of  taxation,  the 
interests  of  the  State  of  New  York,  and  the  dis- 
criminating legislation  of  the  contiguous  States 
of  New  Jersey  and  Pennsylvania,  imperatively 
require  that  the  exemption  in  question  should 
be  granted ; and  furthermore,  that,  so  far  from 
diminishing  the  taxable  property  of  the  State, 
the  effect  of  such  exemption  will  be  (at  least, 
after  a little  time)  to  greatly  increase  it  ;* *  and 

and  working-class  of  the  community.  It  is  a notori- 
ous fact  that  it  is  difficult,  almost  entirely  impossible, 
to  obtain  money  on  mortgage  at  seven  per  cent,  per 
annum,  when  mortgages  of  undoubted  character  can 
be  largely  purchased  at  a discount  of  three  or  five  per 
cent,  per  annum,  the  capitalist  thus  compelling  the 
debtor  to  pay  the  tax.  Thus,  while  the  best  security 
known,  that  of  alien  on  real  estate,  should  command 
money  at  the  lowest  rate,  it  really  has  to  pay  the  high- 
est, in  consequence  of  the  operation  of  unjust  laws. 

* The  following  argument  in  answer  to  the  aver- 
ment that  the  exemption  of  mortgages  from  taxa- 
tion will  diminish  the  taxable  property  of  the  State, 
is  derived  from  an  address  recently  delivered  before 
one  of  the  land  and  building  associations  of  New 
York  city,  by  W.  H.  Peckhani,  Esq. : “Capital  is  the 
product  of  human  labor.  Men  labor  and  use  capital 
in  order  to  increase  that  capital ; in  other  words,  to 
make  a profit.  That  profit  is  the  source  or  subject- 
matter  of  taxation,  and  there  is  no  other.  If  one  man 
owns  capital,  and  another,  by  his  permission,  uses  it, 
agreeing  to  return  it  at  all  events,  the  proportion  of 
the  profits  of  the  use  paid  to  the  capitalist  is  interest ; 
what  that  proportion  is,  will  depend  upon  the  propor- 
tion of  demand  and  supply  of  loanable  capital  and 
upon  the  safety  of  the  security  offered.  It  is  certain, 
however,  that  no  loans  can  be  made  at  a rate  which 
the  borrower  can  not  pay,  and  at  the  same  time  make 
the  average  rate  of  profits  out  of  the  transaction  in 
which  he  uses  the  capital  borrowed.  If  he  can  not, 
he  discontinues  the  business.  Now,  if  one  man  has 
capital  and  loans  it  to  another  for  use,  that  use  is  the 
sole  source  from  which  not  only  interest  and  profits, 
but  from  which  taxes  can  be  paid.  If  the  lender  takes 
security  by  way  of  mortgage  or  otherwise,  such  secu- 
rity does  not  increase  the  property  or  capital  of  the 
community.  The  increase  comes  from  the  use  of  the 
capital  lent.  A man  has  a ship,  or  a mill,  or  other 
property  worth  $10,000,  and  sells  it  to  another  on  cred- 
it, takiug  back  a mortgage  for  the  $10,000.  Or  he  has 
$10,000,  and  loans  it  to  another,  who  with  it  buys  the 
ship  or  mill  he  wants,  and  secures  the  loan  by  mort- 
gage on  it.  By  reason  of  the  sale  there  are  not  two 
properties  of  $10,000  each;  one  the  ship  or  mill,  and 
the  other  the  mortgage.  The  profits  made  by  the 
mill  are  the  only  source  of  taxation. 

“ Whether  you  levy  the  tax  on  the  mortgagor  or 
mortgagee,  or  partly  from  each,  it  is  from  those  prof- 
its that  the  whole  tax  must  be  paid.  If  you  tax  that 
property  directly  in  the  hands  of  the  mortgagor  as 
high  as  it  will  bear,  you  can  not  get  a penny  of  tax 
from  the  mortgagee,  for  if  you  tax  him  also,  he  will 
refuse  to  loan  unless  the  moi’tgagor  pays  it,  and  the 
mortgagor  being  unable,  will  not  borrow.  Relieving 
mortgages  from  taxation,  then,  is  not  decreasing  the 
taxable  property  of  the  State ; it  is  but  a mere  aban- 
donment of  that  indirect  method  of  taxing  real  estate. 
It  is  of  precisely  the  same  character  as  would  be  the 
giving  up  the  custom-duty  on  an  article  and  taxing  it 
in  the  hands  of  the  consumers  in  place  thereof.” 

“ I next  claim  that  the  exemption  of  mortgages  will 
not  exempt  mortgagees  from  their  fair  proportion  of 
the  burden  of  taxation.  In  the  prosecution  of  any 
business  the  State  has  the  first  right  to  its  proportion 


42 


LOCAL  TAXATION. 


tit  the  same  time  prevent  the  diversion  of  a large 
amount  of  the  legitimate  capital  of  the  State 
from  seeking  investment  beyond  its  borders. 

As  an  illustration  of  the  manner  in  which 
such  capital  has  been  diverted,  of  late  years, 
from  employment  in  connection  with  real  estate 
in  New  York,  the  commissioners  would  call  at- 
tention to  the  report  made  to  them,  to  the  ef- 
fect that,  while  in  1859  the  fire  insurance  compa- 
nies of  New  York,  with  assets  of  $26,323,384, 
loaned  on  bond  and  mortgage  $49,801,094  ; in 
1869,  with  assets  amounting  to  $53,722,655, 
they  loaned  on  similar  security  but  $13, 61 1,232. 
At  the  same  time,  the  directors  of  the  largest 
savings  banks  in  the  State  inform  the  commis- 
sioners that  the  applications  made  to  them  to 
loan  on  the  security  of  real  estate  of  unques- 
tioned value,  for  the  purpose  of  its  improvement, 
are  continually  and  largely  in  excess  of  the 
amount  available  for  such  investments. 

At  present,  a large  proportion  of  the  capital 
of  insurance  and  trust  companies  of  the  State 
is  invested  in  governments  ; but  it  is  represent- 
ed to  the  commissioners  by  those  who  profess 
to  know,  that  if  a law  exempting  mortgages 
on  real  estate  from  taxation  wras  once  enacted, 
the  companies  in  question  would  very  largely 
dispose  of  their  bonds,  and  invest  their  assets  ac- 
cording to  the  original  custom  ; and  that  a sim- 
ilar action  by  private  capitalists,  to  whom  the 
perfect  security  which  real  estate  offers  for 
loans  is  always  an  inducement,  would  in  a short 
time  afford  an  ample  supply  of  capital  for  mort- 
gage investments  at  rates  less  than  the  legal 
rates  of  interest,  in  place  of  the  eight,  ten,  or 
even  a larger  percentage  which  the  borrowers 
on  mortgages  are  now  compelled  to  submit  to. 
The  effect  of  this  would  be  unquestionably  to 
stimulate  building  and  land  improvement,  af- 
ford new  opportunities  for  labor,  enlarge  the 
market  for  building  material,  and  rapidly  in- 
crease the  visible,  tangible  wealth  of  the  State. 

OTHER  CONDITIONS  AFFECTING  THE  TAXATION 
OF  PERSONAL  PROPERTY. 

Another  point  of  great  importance  in  con- 
nection with  this  subject,  and  one  which  the 

of  the  profits  iu  the  shape  of  taxes  before  the  balauce 
is  divided  between  the  lender  and  the  borrower. 
This  amount,  however,  the  State  fixes  at  an  arbitrary 
figure,  based  upon  the  sum  which  the  average  busi- 
ness can  on  an  average  pay,  and  still  leave  an  aver- 
age margin  for  interest  and  profits.  Some  business 
may  prove  a loss,  but  the  State  still  exacts  its  arbitra- 
ry average.  Some  may  be  extraordinarily  successful, 
but  the  State  demands  only  its  ordinary  average.  The 
State  must  always  be  paid,  but  always  only  its  fixed 
rate.  The  consequence  is,  that  the  market  rate  of  in- 
terest is  based  upon  the  proportion  given  to  secured 
capital  of  a business  that  has  already  paid  the  taxes 
in  full.  When,  then,  we  say  that  the  market  rate  of 
interest  is  seven  per  cent.,  we  mean  seven  per  cent, 
clear  of  tax,  and  the  fair  division  of  the  profits,  after 
payment  of  the  tax,  will  always  adjust  itself  as  be- 
tween lender  and  borrower,  by  the  rise  or  fall  of  inter- 
est. If  you  should  diminish  the  rate  of  taxation,  the 
lender  would  get  his  proportion  of  the  benefit  in 
greater  rate  of  interest ; and  if  you  increase  it,  he 
would  bear  his  portion  of  the  burden  by  getting  less. 
In  other  words,  the  market  rate  of  interest  is  adjust- 
ed on  the  basis  of  existing  taxation,  and  is  always 
the  net  amount  fairly  belonging  to  the  lender  after 
the  payment  of  taxes.” 


commissioners  do  not  think  has  ever  before  been 
discussed  us  a separate  and  independent  topic, 
is  the  consideration,  how  far  personal  property, 
from  its  very  nature,  from  the  conditions  which 
govern  and  control  human  action,  and  from  the 
action  of  laws,  national  and  State,  is  placed  be- 
yond the  jurisdiction  of  the  State  for  assessment 
and  taxation.  Many  of  the  points  involved  in 
such  an  inquiry,  although  hitherto  attracting 
but  little  attention  from  the  public,  are  sure,  in 
the  future,  under  the  weight  and  vexation  of 
taxes,  to  be  very  closely  scrutinized  ; and  as  the 
commissioners  have  found  very  frequently  that 
officials  in  this  State  and  elsewhere  are  acting 
in  what  seems  to  be  plain  disregard  of  the  prin- 
ciples of  equity  and  the  decisions  of  the  highest 
courts,  an  extensive  litigation  and  demands  for 
reclamations  may  almost  certainly  be  predicated. 

In  preparing  the  way  for  the  construction  of 
a new  or  improved  system  of  taxation,  it  is  ob- 
viously, therefore,  of  the  highest  moment  to  ful- 
ly consider  what  property,  by  legal  or  natural 
conditions,  is  either  wholly  removed  from  State 
jurisdiction,  or  placed  in  such  a doubtful  posi- 
tion as  to  render  clear  and  explicit  legislation,  or 
subsequent  efficient  administration  concerning  it, 
a matter  of  difficulty.  And  as  possessing  or  par- 
taking of  such  a character,  the  following  descrip- 
tions of  personal  property  may  be  enumerated : 

1st.  Imported  goods , wares,  and  merchandise , in 

original  packages , in  possession  of  the  mer- 
chant importer. 

The  power  of  a State  to  tax  property  of  this 
description  was  definitely  settled  in  the  nega- 
tive by  the  Supreme  Court  of  the  United  States 
in  the  case  of  Brown  vs.  The  State  of  Maryland 
(12  Wheaton,  449) ; the  question  involved  be- 
ing the  legality  of  a license  tax  imposed  by  the 
State  as  a prerequisite  to  the  right  to  sell  an 
imported  article.  The  court  (Chief-justice 
Marshall)  held  that  this  tax,  though  indirect  in 
form,  was  in  fact  equivalent  to  a duty  on  im- 
ports, and  therefore  illegal ; and  that  the  right 
to  import  carried  with  it  a right  to  sell.  This 
decision  has  been  carefully  recognized  by  State 
authorities  in  dealing  with  imported  liquors  un- 
der local  license  laws ; but  in  the  levying  of 
State  or  municipal  taxes  on  personal  property, 
the  commissioners  have  reason  to  think  that  it 
has  not  been  thus  recognized,  especially  in  the 
New  England  States ; and  that  ground  thereby 
exists  for  extensive  reclamations.  It  is  obvious 
that  in  the  case  of  the  State  of  New  York,  which, 
through  her  great  city  and  Northern  frontier 
towns,  is  both  the  entrepot  and  the  place  of  sale 
of  a large  proportion  of  all  the  imports  of  the 
United  States,  the  effect  of  this  decision  is  to  re- 
move, beyond  all  question,  an  immense  amount 
of  personal  property  from  all  jurisdiction  of  the 
State  in  respect  to  taxation. 

2d.  Bonds,  notes,  and  other  securities,  or  evidence 
of  indebtedness  of  the  United  States. 

The  national  law  and  the  decisions  of  the 
courts  on  this  subject  are  clear,  explicit,  and  well 


LOCAL  TAXATION. 


43 


understood.  Viewed  from  the  stand-point  of 
“ tax  resources  ” alone,  the  country  is  to  be  con- 
gratulated that  so  large  a proportion  of  these 
securities  (almost  one-half,  or  one  thousand 
millions)  have  passed  into  the  possession  of  for- 
eigners ; but  what  remains  in  the  possession  of 
our  own  citizens,  besides  being  specifically  ex- 
empt from  all  taxation,  are  undoubtedly  made 
the  instruments  whereby  a much  larger  amount 
of  property  than  they  represent  is  enabled  to 
successfully  evade  assessment.  It  is  through 
this  agency  that  fire  and  life  insurance  compa- 
nies evade  taxation  to  a very  great  extent  upon 
their  assets,  and  savings  banks  upon  their  sur- 
plus. Thus,  the  fire  insurance  companies  of 
New  York  city,  with  a capital  of  about  $24,000,- 
000,  and  an  estimated  surplus  of  $11,000,000, 
making  a total  of  $35,000,000,  were  assessed, 
in  1870,  on  a personal  property  valuation  of  only 
$0,240,965,  and  a real  estate  valuation  in  ad- 
dition of  about  $3,000,000. 

3d.  The  deposits  and  the  surplus  of  the  savings 
hanks  of  the  State. 

The  amount  of  personal  property  thus  re- 
moved from  taxation  approximates  the  large 
sum  of  over  $200,000,000.  All  this  property 
being,  however,  within  the  jurisdiction  of  the 
State,  the  exemption  of  the  same  from  taxa- 
tion is  a matter  dependent  wholly  upon  legisla- 
tive action. 

4th.  Indebtedness. 

In  specifying  this  head,  the  commissioners 
would  not  be  understood  as  recognizing  the 
principle  that  the  debt  obligations  of  individuals 
are  legitimate  objects  of  taxation,  but  simply 
that  indebtedness  is  a method  by  which,  as  al- 
ready shown,  a vast  amount  of  property  evades 
taxation.  But  as  the  refusal  to  allow  indebt- 
edness to  offset  valuation  would,  if  thoroughly 
carried  out,  be  destructive  of  commerce  and 
business,  and  as  the  people  of  New  York,  by  re- 
cent popular  vote,  have,  in  fact,  decided  against 
the  adoption  of  any  such  rule  in  the  valuation 
of  property,  the  commissioners,  therefore,  feel 
warranted  in  considering  that  an  amount  of 
personal  property,  equivalent  at  least  to  the  ag- 
gregate of  the  real  indebtedness  of  the  citizens 
of  the  State,  is  at  all  time^  exempt  from  assess- 
ment. 

5th.  Personal  property  belonging  to  citizens  of 
New  York , but  actually  situated  out  of  the  State. 

We  now  come  to  the  consideration  of  a class 
of  cases  involving  questions  of  a difficult  and  in- 
tricate character,  viz.:  in  respect  to  what  deter- 
mines, under  various  conditions,  the  situs  of  per- 
sonal property ; and  about  which  there  has 
been,  from  a most  remote  period,  and  still  is,  a 
conflict  of  laws,  and  a present  different  and 
wholly  discordant  rule  of  practice  in  the  differ- 
ent States. 

The  ordinary  rule  or  fiction  of  law  (mobilia 
personam  sequuntur ) is,  that  all  personal  prop- 
erty follows  the  person  of  the  owner ; and,  ac- 


cordingly, for  purposes  of  taxation,  personal 
property  has  been  generally  held  to  have  no 
situs  away  from  the  person  or  residence  of  the 
owner,  but  is  deemed  to  be  present  with  him  al- 
ways at  the  place  of  his  domicile. 

In  Massachusetts  the  law  defines  personal  es- 
tate for  purposes  of  taxation  to  include  “goods, 
chattels,  money,  and  effects,  wherever  they  are  ; 
ships,  public  stocks,  and  securities,  stocks  in  turn- 
pikes, bridges,  and  moneyed  corporations  within 
or  without  the  State.” 

The  law  proposed  by  the  tax  commissioners 
of  New  Jersey  in  1868  also  defined  the  situs  of 
personal  property  of  the  citizens  of  that  State  in 
similar  language:  “Goods  and  chattels  of  ev- 
ery description,  wherever  they  are.” 

The  law,  and  the  practice  under  the  law,  for 
the  assessment  of  personal  property,  is  also  sub- 
stantially the  same  in  Rhode  Island  and  Con- 
necticut as  in  Massachusetts,  except  that  the 
law  of  Connecticut  provides  “ that  it  shall  not 
be  necessary  to  include  in  the  list  of  any  person 
liable  to  be  assessed  any  property  situated  out 
of  the  State,  when  it  can  be  made  satisfactorily 
to  appear  to  the  assessors  that  the  same  is  fully 
assessed  and  taxed  in  such  State,  to  the  same 
extent  as  other  like  property  owned  by  citizens 
of  such  State;”  and  also  exempts  “money  or 
property  actually  invested  in  the  business  of 
merchandising  or  manufacturing,  when  located 
out  of  the  State.”  In  Massachusetts  and  Rhode 
Island  no  such  liberality  is  tolerated ; although 
the  lack  of  it  obviously  tends  to,  and  actually 
does  result  in,  double  taxation ; and  in  a case 
recently  tried  before  the  Supreme  Court  of  Con- 
necticut ( Sprague  vs.  The  Town  of  Lisbon ),  the 
plaintiff,  a citizen  of  Rhode  Island,  sought  to 
recover  taxes  assessed  on  personal  property  in 
the  form  of  machinery  in  a cotton-mill  located 
and  working  in  Connecticut,  on  the  ground  that 
the  same  was  taxed  to  the  owner  in  the  State  of 
Rhode  Island  as  personal  property. 

In  the  State  of  New  York,  up  to  the  years 
1861-G2,  the  rule  of  assessment  of  personal 
property  appears  to  have  been  in  accordance 
with  that  now  recognized  in  Massachusetts  and 
Rhode  Island,  viz.,  that  it  follows  the  owner 
under  all  circumstances  ; but  in  that  year  a case 
of  much  importance  was  carried  up  to  the  Court 
of  Appeals  under  the  following  circumstances  : 
One  Hoyt  was  taxed  in  the  city  of  New  York 
for  personal  property,  and  resisted  the  taxation 
on  the  ground  that,  although  he  had  personal 
property  outside  of  the  State,  he  had  none 
within  the  State,  in  excess  of  his  just  debts  and 
liabilities ; the  property  in  question  without  the 
State  being  capital  employed  in  business  in  New 
Orleans,  and  farm  stock  and  household  furniture 
in  New  Jersey,  each  taxable  by  local  law  in  the 
States  where  situated.  The  Court  of  Appeals 
decided  the  assessment  to  be  illegal,  and  held 
(Comstock,  C-.  J.)  that  the  property  was  actually 
situated  in  other  States,  in  other  sovereignties, 
protected  by  their  laws  and  taxable  there,  and 
therefore  it  ought  not  to  be  subject  to  a second 
taxation  in  New  York. 


44 


LOCAL  TAXATION. 


The  court  also,  in  rendering  the  decision,  used 
the  following  language : “ There  seems  to  be 
no  place  for  the  fiction  ” (that  personal  proper- 
ty follows  the  owner)  “in  a well-adjusted  sys- 
tem of  taxation  ; in  such  a system  a fundamen- 
tal requisite  is  that  it  be  harmonious,  but  har- 
mony does  not  exist,  unless  the  taxing  power  is 
exerted  with  reference  exclusively  either  to  the 
situs  of  the  property  or  to  the  residence  of  the 
owner.  Both  rules  can  not  obtain,  unless  we 
impute  inconsistency  to  the  law  and  oppression 
to  the  taxing  power.  Whichever  of  these  rules 
we  find  to  be  the  true  one,  whichever  we  find 
to  be  founded  injustice  and  the  reason  of  the 
thing,  it  necessarily  excludes  the  other ; be- 
cause we  ought  to  suppose,  indeed  we  are  bound 
to  assume,  that  other  States  and  Governments 
have  adopted  the  same  rule.  If,  then,  proceed- 
ing on  the  true  principles  of  taxation,  we  sub- 
ject to  its  burdens  all  goods  and  chattels  act- 
ually within  our  jurisdiction,  without  regard  to 
the  owner’s  domicile,  it  must  be  understood  that 
the  same  rule  prevails  everywhere.  If  we  pro- 
ceed in  the  opposite  rule,  and  impose  the  tax  on 
account  of  the  domicile,  without  regard  to  the 
actual  situs , while  the  same  property  is  taxed  in 
another  sovereignty  by  reason  of  its  situs  there, 
we  necessarily  subject  the  citizen  to  a double 
taxation,  and  for  this  no  sound  reason  can  be 
given.” 

“ To  put  a strong  case,  the  owner  of  a South- 
ern plantation,*  with  slaves  upon  it,  may  prefer 
to  reside  and  spend  his  income  in  New  York. 
Our  laws  protect  him  in  his  person  as  a citizen 
of  the  State,  and  for  this  the  State  receives  a 
sufficient  consideration  without  taxing  the  cap- 
ital which  it  does  not  protect.  Under  our  laws, 
can  we  tax  the  wealth  thus  invested  in  slave 
property?  They  ignore,  on  the  contrary,  the 
very  existence  of  such  property  ; therefore  there 
is  no  room  for  the  fiction,  and  only  according  to 
which  the  situs  is  supposed  to  be  here.  But  if 
we  could  make  room  for  that  fiction,  it  still  re- 
mains to  be  shown  that  some  rule  of  reason  or 
principle  of  equity  can  be  urged  in  favor  of  such 
taxation.” 

“ We  may  reverse  the  illustration.  A citi- 
zen, a resident  of  Massachusetts,  may  own  a 
farm  in  one  of  the  counties  of  this  State,  and 
large  wealth  belonging  to  him  may  be  invested 
in  cattle,  in  sheep,  or  horses,  which  graze  the 
fields,  or  are  visible  to  the  eyes  of  the  taxing 
power.  Now,  these  goods  and  chattels  have  an 
actual  situs  as  distinctly  as  the  farm  itself. 
Putting  the  inquiry,  therefore,  with  reference  to 
both,  ‘ are  they  real  estate  and  personal  estate,’ 
so  as  to  be  subject  to  taxation  under  that  defini- 
tion? It  seems  to  me  that  but  one  answer  can 
be  given  to  this  question,  and  that  answer  must 
be  according  to  the  actual  truth  of  the  case.  If 
we  take  the  fiction  instead  of  the  truth,  then 
the  situs  of  these  chattels  is  in  Massachusetts, 
and  they  are  not  within  this  State.  The  statute 
means  one  thing  or  the  other ; it  can  not  have 

* The  decision  of  the  Court  ot  Appeals  in  this  case 
was  delivered  in  June,  1SG1. 


double  or  inconsistent  interpretations;  and  as 
this  is  impossible,  so  we  can  not,  under  and  ac- 
cording to  the  statute,  tax  the  citizen  of  Massa- 
chusetts with  respect  to  his  chattels  here,  and  at 
the  same  time  tax  the  citizen  of  New  York  in 
respect  to  his  chattels  having  an  actual  situs 
there.  In  both  cases  the  property  must  be  with- 
in this  State , or  there  is  no  right  to  tax  it  at  all.” 

The  commissioners  would  adduce  another  au- 
thority in  respect  to  the  sovereignty  of  a State 
over  the  situs  of  property. 

“Every  nation  possesses  and  exercises  ex- 
clusive sovereignty  and  jurisdiction  through- 
out the  full  extent  of  its  territory.  It  follows 
from  this  principle,  that  the  laws  of  every  State 
control  of  right  all  the  real  and  personal  prop- 
erty within  its  territory.  The  second  general 
principle  is,  that  no  State  can,  by  its  laws,  di- 
rectly affect,  bind,  or  regulate  property  beyond 
its  own  territory.  This  is  a consequence  of  the 
first  general  principle  ; a different  system,  which 
would  recognize  in  each  State  the  power  of  reg- 
ulating persons  or  things  beyond  its  territory, 
would  exclude  the  equality  of  rights  among  dif- 
ferent States,  and  the  exclusive  sovereignty 
which  belongs  to  each  of  them.” — Wheaton’s  In- 
ternational Law,  chap.  11,  sec.  2 ; Foelix  Droit 
International. 

The  conclusion,  from  the  reasoning  and  prin- 
ciples of  law  above  given,  would,  therefore, 
seem  to  be  inevitable,  that  the  practice  of  Mas- 
sachusetts, Rhode  Island,  and  other  States,  in 
taxing  property  of  a visible,  tangible  character, 
situated  beyond  and  without  their  own  territory, 
is  contrary  alike  to  the  spirit  of  international  or 
interstate  law,  to  the  just  powers  of  any  State, 
and  to  the  principles  of  justice  and  equity.  In 
New  York,  as  already  shown,  the  decision  of  her 
highest  court  has  made  such  taxation,  both  as 
regards  present  practice  and  future  law,  inad- 
missible ; but  while,  in  accordance  with  such 
decision,  New  York  has,  since  1861,  exempted 
from  taxation  personal  property  of  her  citizens 
of  a visible  nature,  or  of  the  nature  of  chattels, 
when  the  same  is  situated  without  the  State, 
especially  when  a specific  demand  has  been 
made  on  the  assessors  for  such  exemption,  it 
has  nevertheless  been  held  by  officials  that  per- 
sonal property,  in  the  nature  of  negotiable  in- 
struments, bonds  and  mortgages,  stocks,  and 
choses  in  action  are  taxable  to  residents  of  the 
State,  irrespective  of  what  may  be  their  actual 
situs.  But  for  the  present  it  is  sufficient  to  call 
attention  to  the  fact  that  a large  amount  of  per- 
sonal property,  which  in  many  other  States,  in 
virtue  of  the  exercise  of  arbitrary  power,  is  there 
subject  to  taxation,  is  in  New  York  exempt  from 
assessment  by  the  decision  of  her  courts  and  in 
recognition  of  the  principles  of  equity. 

6 th.  Property  in  transitu. 

Under  this  head  it  is  proposed  to  consider  an- 
other class  of  personal  property,  which  through 
a judicial  determination  of  its  situs  has  also  been 
exempted  in  New  York  from  taxation. 

It  is  obviously  inexpedient,  and,  as  an  inter- 


LOCAL  TAXATION. 


45 


ference  in  respect  to  interstate  commerce,  clear- 
ly in  conflict  with  the  Constitution  of  the  United 
States,  for  any  State  to  subject  to  taxation  prop- 
erty merely  in  transitu  through  its  territory. 
But  as  to  the  extent  to  which  personal  property 
may  be  held  to  be  in  such  condition,  and  be 
thereby  exempt  from  taxation,  is  a question 
which  in  New  York  has  been  in  part,  at  least, 
reviewed  by  its  highest  judicial  tribunal.  The 
point  in  controversy,  and  which  was  made  the 
subject  of  a decision  by  the  Court  of  Appeals, 
was,  in  respect  to  the  liability  to  taxation  of  the 
goods  of  a non-resident  owner,  sent  to  New  York 
for  sale,  and  the  proceeds  of  which  sale  were  not 
reinvested  within  the  State.  The  question  came 
up  under  the  following  circumstances : The 
Parker  Mills,  a corporation  foreign  to  New  York, 
manufacturing  nails  in  the  State  of  Massachu- 
setts, had  established  a depot  and  agent  in  the 
city  of  New  York,  to  which  the  nails  were  trans- 
mitted for  sale.  Its  only  business  within  the 
city  of  New  York  consisted  in  making  such  sales, 
the  proceeds  of  which  were  remitted  at  once  to 
the  corporation  in  Massachusetts ; and  where 
sales  were  made  upon  credit,  the  securities  re- 
ceived were  sent  to  the  corporation  for  collec- 
tion. The  tax  commissioners  of  the  city  of  New 
York  held  that  the  corporation  was  conducting 
business  in  the  city,  and  assessed  it  on  the  value 
of  the  nails  in  store,  regarding  that  value  as  the 
amount  or  sum  invested  in  said  business  in  New 
York.  The  payment  of  such  assessment  being 
refused,  the  case  first  came  before  the  Supreme 
Court,  which  affirmed  the  proceedings  of  the  tax 
commissioners  ; but  the  Court  of  Appeals  (Sel- 
den,  J.)  reversed  the  decision,  and  held  that  the. 
case  was  not  included  in  the  act  of  the  State 
(chap.  37  of  1855,  sec.  1),  which  imposes  taxes 
on  the  capital  of  non-residents  employed  within 
the  State  in  a continuous  business ; and  that  it 
was  never  the  policy  of  the  State  to  impose  taxes 
upon  the  property  sent  into  its  territory  for  the 
mere  purpose  of  sale.  The  court  further  held 
the  goods  sold  by  the  agent  of  the  Parker  Mills 
to  be  property  in  transitu ; the  same  in  principle 
with  the  case  of  a drover,  resident  of  another 
State,  who  transports  his  herds  of  cattle  by  rail- 
road to  the  city  of  New  York  for  sale. 

Since  this  decision,  firms  or  corporations  es- 
tablished in  other  States,  but  selling  their  own 
goods,  exclusively,  in  New  York,  although  per- 
manently located  for  such  purposes  of  sale,  in 
respect  to  their  stores,  warehouses,  or  agents, 
have  been  held  to  be  exempt  from  taxation  ; an 
exemption  which  discriminates  most  unfairly 
and  injuriously  against  citizens  of  New  York, 
who,  manufacturing  or  selling  in  the  cities  of 
the  State,  are  subjected  in  general  to  a much 
higher  rate  of  taxation  on  their  property.  For 
example,  three  stores  on  one  of  the  principal 
business  streets  of  New  York  city  were  pointed 
out  by  the  commissioners  of  taxes.  The  first 
and  third  stores  were  occupied,  respectively,  by 
the  agents  of  manufacturers  located  in  Phila- 
delphia and  Connecticut,  paying  no  taxes  to  the 
city  on  their  general  business.  The  second  store  , 


is  occupied  by  a citizen  of  New  York  selling 
goods  of  his  own  manufacture,  and  this  individ- 
ual is  assessed  and  pays  taxes  on  a valuation  of 
$100,000.  The  theory  is,  that  the  goods  sold 
in  stores  Nos.  1 and  3 are  taxed  to  a correspond- 
ing extent  at  the  places  of  their  production  ; but 
such  is  not  the  case  ; for  so  much  as  are  manu- 
factured in  Philadelphia  are  not  taxed  directly 
at  all,  while  those  manufactured  in  the  country 
districts  of  Connecticut  pay  taxes  which,  in  com- 
parison with  those  of  New  York  city,  are  very 
inconsiderable. 

It  is,  however,  to  be  observed,  that  in  the  case 
of  The  Parker  Mills  vs.  The  Commissioners  of 
Taxes  in  New  York  City , the  decision  above  re- 
ferred to  turned  upon  the  assumption  by  the 
Court  of  Appeals,  that  the  laws  of  New  York  did 
not  authorize  the  taxation  of  property  brought 
within  the  territory  of  the  State  for  sale ; but 
the  court  did  not  discuss  or  question  the  right  or 
power  of  the  State  to  tax  such  property  in  case 
the  same  should  be  deemed  expedient.  Since 
the  rendering  of  this  decision,  however,  such  a 
right  on  the  part  of  a State  to  tax  goods  or  mer- 
chandise brought  within  its  territory  for  sale,  has 
been  affirmed  by  the  Supreme  Court  of  the  Unit- 
ed States,  provided  the  State  subjects  similar 
property,  the  product  of  its  own  citizens,  to  a like 
taxation.  For  further  notice  of  this  extraordi- 
nary decision,  reference  is  made  to  Wallace’s 
Reports  (vol.  viii.,  p.  138,  Woodruff  vs.  Par- 
ham),  or  to  the  Appendix  to  this  report,  where 
an  abstract  of  the  case  is  given,  and  also  of  the 
dissenting  opinion  of  Justice  Nelson,  who  took 
ground  that  if  “ a State  can  tax  the  sale  of  an 
article,  the  product  of  a sister  State,  in  the  origi- 
nal package,  when  imported  into  the  former  for 
a market,  under  the  Constitution  of  the  United 
States,  then  no  security  or  protection  exists  in 
this  Government  against  obstructions  or  inter- 
ruptions of  commerce  among  the  States;  and 
one  of  the  principal  grievances  that  led  to  the 
convention  of  1787  and  to  the  adoption  of  the 
Federal  Constitution,  has  failed  to  be  remedied 
by  that  instrument ; and,  hereafter,  this  inter- 
state commerce  is  necessarily  left  to  the  regula- 
tion of  the  Legislatures  of  the  different  States.” 

But  with  the  power  to  tax  property  brought 
within  the  State  from  other  States,  exclusively 
for  sale,  thus  vested  beyond  dispute  ki  the  Leg- 
islature of  New  York,  it  seems  certain  that  ex- 
pediency can  never  allow  of  its  exercise,  inas- 
much as  to  exercise  it  would  be  to  strike  a most 
fatal  blow  at  the  present  commercial  and  mer- 
cantile supremacy  of  the  State. 

7th.  Negotiable  instruments. 

It  is  an  interesting  fact  that  it  is  only  within 
a comparatively  recent  period  that  “ negotiable 
instruments,”  in  the  generally  accepted  sense  of 
such  term,  have  become  of  sufficient  importance, 
by  reason  of  their  amount,  to  warrant  a special 
consideration  in  the  United  States  in  a scheme 
of  taxation ; but  latterly,  through  the  creation 
of  a vast  national  debt  and  the  enormous  cred- 
its requisite  to  meet  the  recent  expenditures 


4 G 


LOCAL  TAXATION. 


of  States,  municipalities,  and  corporations,  they  j 
have  come  to  form  the  largest  single  item  of 
the  personal  property  of  the  country.  In  con- 
sidering the  taxation  of  such  instruments,  three 
questions  naturally  suggest  themselves  : 1st,  the 
question  of  practicability  ; 2d,  of  expediency  ; 
3d,  of  the  extent  of  the  jurisdiction  of  a State 
over  such  instruments  for  the  purpose  of  taxa- 
tion. 

And,  1st,  in  respect  to  the  question  of  the 
practicability  of  taxing  such  instruments,  it  is 
to  be  observed  that  as  property,  or  representa- 
tives of  property,  they  are  especially  capable  of 
transference  and  concealment.  In  fact,  as  they 
ordinarily  exist,  they  may  be  said  to  be  invisi- 
ble property  ; and  hence  it  is  obvious  that,  in 
order  to  subject  them  or  their  possessors  to  di- 
rect taxation,  some  process  of  personal  inquisi- 
tion is  necessary ; a matter  always  difficult,  but 
made  more  so  in  this  case,  for  the  reason  that 
the  subjection  of  these  instruments  to  taxation 
(especially  in  cities,  where  they  are  mostly  held) 
is  tantamount  to  rendering  them  incapable  of 
possession ; for  no  one  at  the  present  time  will 
permanently  hold  securities  paying  only  four 
and  a half,  three,  two,  or  a fraction  of  one  per 
cent,  per  annum  ; which  is  the  rate  which  rail- 
road and  State  bonds  must  in  general  pay  in 
New  York  after  the  local  rates  of  taxation  are 
deducted  from  their  interest.  The  simple 
statement  of  the  case,  therefore,  renders  it  evi- 
dent that  either  negotiable  instruments  are  not 
held  in  the  State  of  New  York,  or  they  are  not 
taxed.  The  State  of  Connecticut,  making  use 
of  the  system  of  personal  inquisition,  taxes, 
theoretically,  these  securities  at  their  full  value, 
and,  theoretically,  has  driven  them  out  of  her 
territory.  We  say  theoretically,  for,  if  it  was 
the  custom  in  Wall  Street  for  bankers  and 
brokers  to  have  an  almanac  in  which  predic- 
tions pertinent  to  their  occupations  were  set 
over  against  particular  dates,  we  should  find 
entered  just  previous  to  the  first  of  October  (the 
day  of  assessment  in  Connecticut)  this  memo- 
randum : “ Expect  large  supplies  of  bonds  from 
Connecticut  about  these  times;"  and  from  the 
15th  to  the  31st  of  October  another  entry  to 
this  effect : “ Bonds  begin  to  go  back  again  to 
Connecticut .” 

2d.  But  if  negotiable  instruments,  from  the 
very  nature  of  the  case,  are  either  not  taxed,  or, 
if  taxed,  not  held,  the  question  arises  : Is  it  ex- 
pedient to  attempt  to  tax  them  ? or,  if  expedi- 
ent, is  it  not  preferable  to  abandon  the  attempt 
at  direct  taxation,  and  adopt  the  Pennsylvania 
method  of  taxing  directly  the  interest  paid  by 
corporations,  and  requiring  the  corporations  to 
become  responsible  for  its  collection?  Again, 
if  the  effect  of  an  actual  and  direct  taxation  of 
these  instruments  is  to  drive  them  from  the  ju- 
risdiction of  the  State  (as  would  to  a great  extent 
be  undoubtedly  the  case),  then,  it  may  be  asked, 
is  not  the  State  subjecting  its  citizens  to  restric- 
tions more  onerous  than  those  to  which  the  cit- 
izens of  any  foreign  or  some  kindred  States  are 
subjected  ? Is  it  not  interfering  with  a move- 


ment of  capital  which  in  the  end  will  be  re- 
strictive of  development?  Is  it  not,  in  sub- 
stance, saying  to  itself,  to  its  railroad  and  other 
corporations : You  can  not  borrow  money  for 
works  of  public  necessity  or  utility  in  the  home 
market ; or,  if  you  do  borrow,  you  must  either 
directly  or  indirectly  pay  an  excessive  interest ; 
and,  if  such  interest  is  paid,  does  the  public  gain 
any  thing  ? Or,  figuratively,  does  it  not  put  into 
one  pocket  only  as  much  as  it  takes  out  of  the 
other,  less  the  cost  of  collection  ? The  predic- 
tion is  often  made,  and  the  hope  indulged,  in 
view  of  the  immense  natural  resources  and  the 
increasing  wealth  and  population  of  the  United 
States,  and  the  further  fact  that  the  march  of 
empire  tends  steadily  westward — that  New  York 
city,  at  no  distant  day,  will  become  the  money- 
ed centre  for  the  civilized  world.  But  this  can 
never  be  so  long  as  New  York  imposes  restric- 
tions on  the  concentration  and  movement  of 
active  moneyed  capital,  which  do  not  exist  in 
other  and  financially  competitive  nations.  If  a 
Mexican  or  British  colonial  railroad  or  State 
improvement  loan,  for  example,  were  tendered 
to  the  New  York  market,  and  if  financial  or  po- 
litical reasons  should  render  it  expedient  that 
such  loans  should  be  there  taken,  it  could  not 
be  done,  for  the  reason  that  the  State  taxation 
of  to-day  would,  of  necessity,  require  New  York 
bankers  and  capitalists  to  demand  nearly  fifty 
per  cent,  more  of  interest  than  would  be  asked 
by  their  foreign  competitors.  Is  it  not  time, 
therefore,  that  we  put  an  end  to  this  indulging 
in  predictions  of  our  future,  and  in  bragging  of 
what  we  are  going  to  do,  and  rather  set  our- 
selves to  work  to  practically  consider  what  it  is 
that  stands  in  the  way  of  our  doing;  and  wheth- 
er if,  with  freedom  continually  upon  our  lips, 
we  are  not  continually  sanctioning  laws  and 
practices  which  are  not  only  inconsistent  with 
freedom,  but  also  obstructive  to  growth  and  de- 
velopment. The  commissioners  would  not,  how- 
ever, be  understood  in  this  as  pleading  for  the 
exemption  of  moneyed  capital  from  taxation, 
for  they  are  not  in  any  way  assuming  such  a 
position  : but  they  are  pleading  that  the  State, 
in  dealing  with  such  property  for  the  purpose 
of  obtaining  revenue,  should  not  tax  it  in  a way 
as  to  place  the  State  and  its  great  city  at  a dis- 
advantage, as  compared  with  every  other  com- 
mercially and  financially  competitive  country. 

3d.  The  consideration  of  the  extent  of  the 
jurisdiction  of  the  State  over  negotiable  instru- 
ments for  the  purpose  of  taxation  opens  up 
again  a new  series  of  questions,  involving  the 
situs  of  personal  property  under  different  con- 
ditions, of  much  novelty  and  of  not  a little  in- 
tricacy. As  already  stated,  the  general  practice 
in  New  York  has  been,  and  still  is,  to  hold  that, 
however  it  may  be  in  respect  to  visible  personal 
property,  or  property  in  the  nature  of  chattels, 
invisible  personal  property — i.  e.,  bonds,  prom- 
issory notes,  choses  in  action,  and  the  like — 
has  no  situs  away  from  the  owner,  and  is 
j therefore  always  taxable  to  the  owner  at  his 
| place  of  residence  or  domicile.  As  bearing, 


LOCAL  TAXATION. 


47 


however,  upon  such  assumption  and  practice, 
the  commissioners  would  especially  ask  atten- 
tion to  the  following  judicial  opinions  and  de- 
cisions, which  are  for  the  most  part  of  recent 
date,  and  closely  connected  with  the  recent  in- 
creased incidence  of  taxation. 

In  the  case  of  the  British  Commercial  Life  In- 
surance Company  vs.  The  Commissioner  of  Taxes 
of  the  City  of  New  York  (18  Abb.  R.,  and  31 
N.  Y.  R.,  p.  32),  the  Court  of  Appeals  held  that 
negotiable  bonds  owned  by  foreign  insurance 
companies,  and  deposited,  under  compulsion, 
with  the  State  Comptroller,  have  a situs  in  this 
State,  and  are  deemed  money  in  business  with- 
in the  meaning  of  the  act  of  1855  ; and  that  the 
companies  are  properly  taxed  at  the  place  where 
they  have  their  principal  office,  or  place  of  busi- 
ness within  this  State.  And  as  in  accordance 
with  the  above  decision  negotiable  instruments 
or  bonds,  the  property  of  foreigners,  brought 
into  New  York  for  the  temporary  purpose  of 
pledge,  are  taxed,  it  is  evident  that  New  York 
adopts  two  opposite  and  inconsistent  rules  for 
the  determination  of  the  situs  of  such  property  : 
First,  that  it  follows  the  owner,  and  must  be 
taxed  where  the  ownm*  is  ; and,  second,  that  it 
does  not  follow  the  owner,  and  must  be  taxed 
where  the  property  is  located,  or  actually  is. 
Again,  in  respect  to  the  capital  of  citizens  of  a 
State  invested  without  the  State,  the  decisions 
of  the  New  York  Court  of  Appeals  (23  N.  Y., 
232)  and  of  the  Supreme  Court  of  Vermont  (23 
Vt.,  152)  would  seem  to  warrant  the  conclu- 
sion that  a resident  of  New  York  is  not  liable 
to  be  assessed  and  taxed  in  this  State  for  his 
capital  invested  in  loans  in  other  States  upon 
securities  taken  and  held  in  those  States  by  his 
agents.  Whether  the  owner  of  property  thus 
situated  is  liable  to  be  assessed  for  it  in  New 
York,  depends  upon  the  question  whether  it 
can  be  properly  and  legally  held  to  be  within 
the  State  at  the  time  of  the  assessment ; and  if 
such  property  has  no  actual  location  or  situs 
within  the  State,  notwithstanding  the  owner’s 
residence  is  here,  it  would  not  seem  to  be  here 
subject  to  taxation. 

Furthermore,  the  principle  that  personal  prop- 
erty does  follow  the  owner  for  the  purposes  of  tax- 
ation, would  seem  to  be  opposed  by  the  follow- 
ing facts  and  decisions : 

1.  England,  Austria,  and  Italy  tax  non-resi- 
dent holders  of  their  national  debts  at  the  place 
where  the  debt  is  held  to  have  been  created  or 
inscribed. 

2.  Attachments  or  processes  of  law  are  valid 
against  all  personal  property  in  the  nature  of 
negotiable  instruments,  in  the  place  where  such 
instruments  are  situated,  irrespective  of  the 
domicile  or  residence  of  the  owner. 

3.  In  the  recent  case  of  Maltby  vs.  The 
Reading  Railroad,  the  plaintiff,  a non-resident 
of  Pennsylvania,  resisted  State  taxation  on  a 
railroad  bond  issued  by  the  defendants,  and  se- 
cured by  a mortgage  on  their  road,  on  the  gen- 
eral ground  that  the  property  taxed  was  wholly 
personal,  and  followed  the  owner  out  of  the 


State.  The  Supreme  Court  of  Pennsylvania 
(Woodward,  C.  J.)  sustained  the  validity  of  the 
taxation,  on  the  ground  that  a railroad  mortgage 
bond  is  a mere  paper  evidence  of  property  exist- 
ing at  the  place  where  the  bond  was  created, 
and  used  the  following  language  : 

“ The  plaintiff  can  not  enforce  the  bond 
where  he  lives ; he  must  come  here  to  gather 
its  fruits ; it  is  founded  upon  and  derives  its 
value  from  a mortgage ; but  that  mortgage  is 
here,  and  the  property  and  franchises  which  the 
mortgage  binds  are  here  within  our  jurisdiction. 
The  bond  signifies  his  right  to  recover  so  much 
money  out  of  the  mortgaged  estate,  but  that  es- 
tate not  only  belongs  to  our  jurisdiction,  but  was 
in  part  created  by  our  authority.” 

4.  In  the  case  of  the  Ohio  and  Mississippi 
R.  R.  vs.  Wheeler  (1  Black  U.  S.  R.,  286),  it  was 
held  by  the  Supreme  Court  of  the  United  States 
that  when  a corporation  is  created  by  the  laws 
of  a State,  the  legal  presumption  is  that  its 
members  are  citizens  of  that  State  in  which 
alone  the  corporate  body  has  legal  existence. 
Hence  the  inference  seems  warranted  that  the 
stock  of  a corporation  does  not  follow  the  per- 
son. 

5.  The  principle  that  two  States  can  not  at 
the  same  time  tax  the  same  property , and  that  a 
State  can  not  tax  property  and  interests  lying 
beyond  its  jurisdiction , has  been  also  positively 
affirmed  by  the  Supreme  Court  of  the  United 
States  (December,  1868)  in  the  case  of  the 
Northern  Central  Railroad  vs.  Jackson  (6  Wal- 
lace, 262).  The  railroad  corporation  in  ques- 
tion, extending  from  Baltimore,  in  Maryland,  to 
Sunbury,  in  Pennsylvania,  was  the  result  of  the 
consolidation  of  four  railroad  companies;  one 
incorporated  by  the  State  of  Maryland,  and  three 
by  the  State  of  Pennsylvania.  The  latter  State 
imposed  a tax  of  three  mills  per  dollar  of  the 
principal  of  each  bond  issued  by  such  consolida- 
ted road,  which  tax  the  company  at  their  office 
in  Baltimore  deducted  from  the  coupons  of 
bonds  held  by  one  Jackson,  a non-resident  of 
Pennsylvania.  The  Court,  by  Mr.  Justice  Nel- 
son, decided  adversely  to  the  tax,  on  the  ground 
that  the  bonds  were  issued  upon  the  credit  of 
the  line  of  the  road,  a portion  of  which  was 
within  the  jurisdiction  of  the  State  of  Maryland ; 
and  that  the  security  bound  and  pledged  for  the 
payment  of  the  bonds  and  their  interest  em- 
braced the  Maryland  portion  of  the  road  equally 
with  that  portion  situated  in  the  State  of  Penn- 
sylvania, respecting  which  condition  of  affairs 
the  Court  used  the  following  language : 

“ It  is  apparent,  if  the  State  of  Pennsylvania 
is  at  liberty  to  tax  these  bonds  to  the  extent  of 
this  Maryland  portion  of  the  road,  she  is  taxing 
property  and  interests  beyond  her  jurisdiction. 
Again,  if  Pennsylvania  can  tax  these  bonds, 
upon  the  same  principle  Maryland  can  tax 
them  ; this  is  too  apparent  to  require  argument. 
The  consequence  of  this,  if  permitted,  w'ould  be 
double  taxation  of  the  bond-holder.  The  effect 
of  this  taxation  is  readily  seen  ; a tax  of  three 
mills  per  dollar  of  the  principal  at  an  interest 


48 


LOCAL  TAXATION. 


of  six  per  centum,  payable  semi-annually,  is  ten 
per  centum  per  annum  of  the  interest ; a tax, 
therefore,  by  each  State,  at  this  rate,  amounts  to 
an  annual  reduction  from  the  coupons  of  twenty 
per  centum ; and  if  this  consolidation  of  the 
line  of  the  road  had  extended  into  Virginia  or 
Ohio,  or  into  both,  the  deduction  would  have 
been  thirty  or  forty.  If  Pennsylvania  must  tax 
bonds  of  this  description , she  must  confine  it  to 
bonds  issued  exclusively  by  her  own  corporations. 
Our  conclusion  is,  that  to  permit  the  deduction 
of  this  tax  from  the  coupons  in  question  would 
be  giving  effect  to  the  acts  of  the  Pennsylvania 
Legislature  upon  property  and  interests  lying 
beyond  her  jurisdiction.” 

In  face  of  this  decision,  it  is  a question  of  no 
little  pertinence  for  the  Legislature  of  New 
York,  and  its  commissioners,  to  consider  what 
position  shall  be  taken  in  a new  tax  system  in 
respect  to  this  class  of  property,  i.  e.,  mortgage 
bonds,  issued  by  railroad  or  other  corporations 
without  the  State ; and  also  by  what  right  New 
York,  Massachusetts,  Connecticut,  and  other 
States,  now  tax  such  securities  directly,  under 
the  assumption  that  their  situs  is  at  the  place  of 
their  owner’s  domicile,  and  not  in  the  place  where 
they  are  actually  situated  or  created. 

G.  In  the  foregoing  cases,  the  situs  of  negotia- 
ble instruments  in  the  form  of  bonds  has  been 
considered.  Let  us  next  examine  how  far  the 
generally  received  fiction  of  law,  that  “ personal 
property  follows  the  owner,”  holds  good  in  re- 
spect to  negotiable  promissory  notes  and  other 
like  evidences  of  property. 

In  the  case  of  Pelham  vs.  Pose  (9  Wallace, 
106),  it  wras  held  by  the  Supreme  Court  of  the 
United  States  that  a promissory  note  is  a phys- 
ical thing,  capable  of  possession  ; and  can  not 
be  regarded  as  attached  by  a United  States 
marshal,  until  the  note  itself  was  actually  taken 
possession  of  by  the  officer.  Hence  the  infer- 
ence that  a negotiable  instrument  of  this  char- 
acter has  a situs  of  its  own,  and  does  not,  as  per- 
sonal property,  necessarily  follow  the  owner. 

In  the  case  of  McNeilage  vs.  Holloway  (1 
Barnwell  & Allison’s  Reports,  218),  the  Court  of 
King’s  Bench,  England,  Lord  Ellenborougli, 
C.  J.,  presiding,  it  was  decided  that  negotiable 
instruments  are  chattels  personal,  and  that  a ne- 
gotiable note  payable  to  the  order  of  an  unmar- 
ried woman  becomes  the  property  of  her  hus- 
band without  her  indorsement,  on  the  ground 
that  it  was  not  a chose  in  action , but  a chattel 
personal.  If  this  decision,  which  is  the  law  of 
England,  is  correct,  it  would  seem  to  follow 
that  all  negotiable  instruments  of  this  character 
have  their  situs  in  the  place  where  they  are 
found,  and  follow  the  same  rule,  as  respects  tax- 
ation and  attachment,  as  applies  to  other  chat- 
tels personal.  Taxation,  consequently,  imposed 
on  all  species  of  property  of  this  nature  in 
States  where  the  property  is  not  actually  exist- 
ing, is  unconstitutional,  as  much  so  as  it  would 
be  to  tax  real  estate  and  farm  stock  in  one  State 
that  are  situated  in  another  State.  “In  truth, 
such  instruments  (negotiable  instruments)  are 


treated  not  as  mere  choses  in  action,  but  rather  as 
chattels  personal.  Choses  in  action  are  not  assign- 
able by  law  ; and  actions  must  be  brought  there- 
on in  the  name  of  the  original  parties.  But 
negotiable  notes  are  transferable  by  indorse- 
ment ; and  when  transferred  the  indorser  may 
sue  in  his  own  name  ” (Story,  Conflict  of  Laws , 
§ 359). 

In  another  English  case,  The  Attorney-Gener- 
al vs.  Bouvens  (4  Meesson  & Welsby,  171,  190), 
Lord  Abinger  decided,  clearly  and  explicitly, 
that  Russian,  Danish,  and  Dutch  government 
bonds,  payable  to  bearer,  have  a situs  where  they 
are  actually  situated,  and  may  be  there  taxed 
for  probate  duty.  He  says : “ Such  an  instru- 
ment is  in  effect  a salable  chattel , and  follows 
the  nature  of  other  chattels  as  to  the  jurisdic- 
tion to  grant  probate.”  He  cited  the  case  of  the 
Attorney -General  vs.  Hope,  decided  by  the  House 
of  Lords,  where  it  was  held  that  registered  stocks 
of  the  State  of  New  York  and  the  United  States, 
owned  by  an  Englishman  dying  in  England, 
were  not  subject  to  probate  duty,  on  the  ground 
that  they  were  not  negotiable  instruments  which 
pass  by  delivery,  and  which  are  chattels  personal, 
having  a situs  where  found ; and  that  the  ap- 
plication of  the  probate  duty  depends  upon  the 
physical  question  of  locality.  In  England,  ne- 
gotiable instruments  are  subject  to  attachment 
and  sale,  and  since  the  enactment  of  1 and  2 Vic- 
toria, 110,  § 12,  are  subject  to  execution ; and  it 
seems  to  be  a well-s.ettled  principle  of  law,  both 
in  that  country  and  in  the  United  States,  that 
such  instruments  have  a situs  and  may  be  pro- 
ceeded against  in  rem. 

In  fact,  this  class  of  instruments  could  not 
continue  to  exist  as  agencies  of  commerce  and 
as  forms  of  investment,  if  it  was  decided  that 
they  did  not  have  a situs  where  found.  If  the 
situs  of  a bond  payable  to  bearer  is  not  with  a 
vendor,  he  can  not  convey  title,  in  case  of  sale, 
to  a bona  fide  purchaser.  Certainly  no  prudent 
man  would  buy  negotiable  instruments  in  open 
market  if  he  was  liable  to  be  confronted  by  a 
claimant  who  alleged  that,  at  the  time  of  the 
purchase  here,  he  was  the  owner  of  the  negotia- 
ble instrument,  and  a resident  of  a distant  State 
or  country  where  was  the  situs  of  the  instrument, 
and  where  was  consequently  the  legal  title. 

In  New  York  bank  notes  are  subject  to  exe- 
cutions, and  all  forms  of  negotiable  instruments 
are  subject  to  attachment  and  sale  as  the  prop- 
erty of  non-resident  debtors.  In  case  of  attach- 
ment, we  sell  the  available  value  of  these  instru- 
ments in  the  market ; we  do  not  proceed  against 
the  debtors  ; we  sell  the  instruments  as  chattels. 
It  would  seem  that  the  constitutionality  of  the 
attachment  laws  of  the  various  States  against 
negotiable  instruments  can  not  be  seriously 
questioned.  The  situs  is  the  main  element  in 
a negotiable  instrument  payable  to  bearer ; and 
the  decision  in  the  United  States  Court  in 
the  case  of  the  Northern  Railroad  vs.  Jackson 
(7  Wallace,  202),  before  referred  to,  that  double 
taxation  by  different  States  is  unconstitutional, 
would  seem  to  decide,  in  harmony  with  the  de- 


LOCAL  TAXATION. 


49 


cisions  of  the  English  courts  and  those  also  of 
the  Continent,  that  the  State  where  the  actual 
situs  of  negotiable  instruments  ( not  in  transitu ) 
is,  must  be  the  only  place  where  a constitution- 
al tax  can  be  levied,  and  that  in  case  of  conflict 
of  jurisdiction,  the  actual  situs  must  control ; a 
principle,  indeed,  explicitly  affirmed  by  the  Su- 
preme Court  of  the  United  States  in  the  case  of 
Green  vs.  Van  Buskirk  (7  Wallace,  139),  which 
came  up  on  an  appeal  from  the  New  York  courts. 
(See  Appendix  B.) 

Taxation  of  trustees. 

Before  leaving  this  department  of  inquiry,  it 
is  important  to  call  attention  to  an  apparent  de- 
fect in  the  existing  State  statute,  which,  if  not 
already  taken  advantage  of  for  the  exempting 
of  property  from  taxation,  would  seem  to  afford 
abundant  opportunity  for  so  doing,  especially  in 
respect  to  property  the  control  and  actual  situs 
of  which  easily  passes  by  possession  and  physical 
transfer.  The  first  volume  of  Revised  Statutes, 
389,  provides  that  “ Every  person  shall  be  as- 
sessed in  the  town  or  ward  where  he  resides 
when  the  assessment  is  made  for  all  personal 
estate  owned  by  him,  including  all  personal  es- 
tate in  his  possession,  or  under  his  control  as 
agent,  trustee,  guardian,  executor,  or  adminis- 
trator; and  in  no  case  shall  property  soheldunder 
either  of  these  trusts  he  assessed  against  any  oth- 
er person .”  It  would  seem,  therefore,  that  prop- 
erty in  the  nature  of  negotiable  instruments  can 
be  readily  concealed  from  assessment  within  the 
State  by  transfer  to  a friend  as  trustee,  and  be 
wholly  placed  by  statute  beyond  the  power  of  the 
State  for  taxation,  in  case  the  trustee,  by  reason 
of  his  residence,  is  subject  to  another  and  inde- 
pendent sovereignty. 

8th.  Situs  of  ships  for  the  purpose  of  local  tax- 
ation. 

The  practice  in  New  York  at  present,  and  in 
the  New  England  States,  is  to  value  and  assess 
ships  as  personal  property,  to  the  owner  at  the 
place  of  his  residence.  The  Court  of  Appeals 
of  the  State  of  New  York,  in  the  case  of  Hoyt  vs. 
Commissioners  of  Taxes  of  New  York  (23  N.  Y., 
240),  before  referred  to,  however,  expressed  the 
opinion  that  ships  at  sea  have  no  situs  other 
than  the  port  at  which  they  are  registered,  and 
are  justly  taxable  to  the  owner  at  such  places  of 
registry  only.  The  laws  of  the  United  States 
also  provide  that  no  bill  of  sale,  mortgage,  or 
conveyance  of  a vessel  shall  be  valid  unless  re- 
corded at  the  port  where  the  ship  is  registered 
or  enrolled.  In  the  case  of  The  City  of  New 
Albany  vs.  Meeken  (3  Indiana,  page  481)  this 
question  has  been  made  the  direct  subject  of  a 
legal  decision.  The  defendant  was  a resident 
of  New  Albany,  Indiana,’  and  was  assessed  for 
personal  property  in  respect  to  a steamboat  en- 
rolled at  Louisville,  Kentucky,  and  which  touch- 
ed only  occasionally  at  New  Albany.  It  was 
held  that  the  tax  was  illegal,  the  Supreme  Court 
of  Indiana  observing  “ that  the  only  question 
we  have  to  consider  is  whether  the  boat  or  the 
D 


defendant’s  share  is  within  the  city.”  In  the 
case  of  Hays  vs.  The  Pacific  Mail  Steamship 
Company  (17  Howard,  713),  in  which  the  com- 
pany resisted  taxation  on  their  vessels  by  the 
city  of  San  Erancisco,  the  Supreme  Court  of  the 
United  States  decided  the  taxation  illegal,  on  the 
following  grounds  : The  provisions  of  the  acts 
of  Congress,  31st  December,  1792,  and  29th 
July,  1850,  “very  clearly  indicate  that  the  dom- 
icile of  a vessel  that  requires  to  be  registered,  if 
we  may  so  speak,  or  home  port,  is  the  port  at 
which  she  is  registered,  and  where  (in  the  case 
in  question)  it  is  admitted  the  capital  invested 
is  subject  to  State,  county,  and  other  local  tax- 
es. We  are  satisfied  that  the  State  of  Califor- 
nia had  no  j urisdiction  over  these  vessels.  They 
were  there  but  temporarily,  with  their  situs  at 
the  home  port,  where  the  vessels  belonged,  and 
where  the  owners  were  liable  to  be  taxed  for  the 
capital  invested.” 

It  is  also  an  interesting  circumstance  that  this 
legal  controversy  concerning  the  situs  of  a ship 
for  the  purpose  of  taxation  has  its  almost  exact 
counterpart  in  the  records  of  English  law  ; case 
after  case  having  formerly  come  up  before  the 
English  courts  in  which  the  question  involved 
was : Shall  the  ship  or  her  owners  be  taxed  at 
the  place  of  the  vessel’s  registry,  or  at  the  dom- 
icile of  her  proprietors  ? The  ultimate  decision 
was,  that  the  only  situs  of  a vessel  for  taxation 
is  the  port  of  her  registry,  and  this  decision  was 
recognized  in  practice  until  Parliament  and  the 
people  arrived  at  the  conclusion  that  it  was  for 
the  interest  of  the  nation  that  ships  should  no 
longer  he  taxed  directly  in  any  manner. 

General  considerations  pertinent  to  the  subject. 

In  calling  attention  to  the  above  facts,  and  the 
opinions  and  decisions  of  the  various  courts,  the 
commissioners  would  not  be  understood  as  tak- 
ing the  position  that  such  facts  and  decisions 
are  necessarily  and  in  all  respects  conclusive  as 
to  the  limitations  of  the  power  of  States  in  re- 
spect to  subjecting  certain  descriptions  of  prop- 
erty to  local  taxation ; but  they  do  claim  to 
have  abundantly  proved  that  some  of  the  pow- 
ers now  claimed  and  exercised  by  New  York,  in 
common  with  other  States,  are  doubtful  as  re- 
spects equity  and  legality,  and  that  in  framing 
a new  tax  system,  designed  to  be  permanent,  it 
will  not  do  to  assume  that  ancient  or  common 
usage  is  always  synonymous  with  “present 
right.” 

The  sovereignty  of  a State  in  respect  to  tax- 
ation is  thus  defined  in  its  fullest  extent  by  one 
judge  of  a United  States  Court  (Ingersoll,  J.), 
in  the  following  language : “ The  taxing  power 
of  a State  is  one  of  its  attributes  of  sovereignty, 
and  where  there  has  been  no  compact  with  the 
Federal  Government  or  session  of  jurisdiction  for 
the  purposes  specified  in  the  Constitution,  this 
power  reaches  all  the  property  and  business 
within  the  State.”  But  the  limitation  on  such 
sovereignty  is  also  implied  in  the  language  of 
another  United  States  judge  of  more  extended 
reputation  (Story,  fdonfiict  of  Laws , § 550),  who 


50 


LOCAL  TAXATION. 


says  : “A  nation  within  whose  territory  any  per- 
sonal property  is  actually  situated  has  entire 
dominion  over  it  while  therein,  in  point  of  sov- 
ereignty and  jurisdiction,  as  it  has  over  immov- 
able property  situated  there.”  If,  then,  the  sov- 
ereignty of  Pennsylvania  in  respect  to  mortgage 
bonds  issued  by  corporations  of  its  own  creation 
is  complete,  which  sovereignty  the  courts  of 
Pennsylvania  have  claimed  to  its  fullest  extent, 
in  Maltby  vs.  Reading  R.  R.  Co .,  and  the  Su- 
preme Court  of  the  United  States  have  also  in- 
directly affirmed  ( Northern  R.  R.  Co.  vs.  Jack- 
son , 7 Wallace,  262),  it  is  difficult  to  see  what 
sovereignty  there  is  or  can  be  in  New  York  or 
any  other  State  over  the  same  property  for  the 
purpose  of  taxation. 

Relation  of  the  distribution  of  property  to  taxa- 
tion. 

But  apart  from  the  question  of  sovereignty, 
there  is  another  view  to  be  taken  of  this  sub- 
ject. A State  is  not  only  bound  morally  to  do 
Avhat  is  right,  and  to  refrain  from  acts  of  doubt- 
ful equity  because  possessed  of  power,  but  it  is 
in  the  highest  degree  expedient,  especially  in 
the  case  of  States  situated  like  New  York  and 
Massachusetts,  that  they  should  not  in  any  de- 
gree act  inequitably.  In  all  the  older  and  more 
densely  populated  States  of  the  Union,  wealth, 
obeying  the  law  recognized  heretofore  in  all 
ages  and  in  all  countries,  is  rapidly  passing  from 
the  hands  of  the  many  into  the  possession  of  the 
few,  and  with  a degree  of  rapidity  which  we 
believe  the  public  have  not  fully  recognized ; 
while,  in  opposition  to  the  experience  of  all  oth- 
er ages  and  countries,  the  sovereignty  over  prop- 
erty by  the  State  vests,  and  will  always  remain 
vested,  through  universal  suffrage,  never  before 
existing,  in  the  hands  of  the  many  who  have  lit- 
tle or  no  property  rather  than  in  the  few  who 
possess  it.  When  Massachusetts,  therefore,  as- 
sumes, in  virtue  of  State  sovereignty,  to  tax  her 
own  citizens  for  property  “ without  the  com- 
monwealth,” and  beyond  her  jurisdiction,  is  she 
not  establishing  a precedent  in  the  violation  of 
justice  and  equity  which  at  no  distant  day  may 
be  imitated  in  other  ways  by  her  voting  popu- 
lation, forty-two  per  cent,  of  whom  already  have 
no  taxable  property,  and  therefore  no  immedi- 
ate interest  in  the  protection  of  property  ?* 

9th.  Exemption  of  property  from  taxation  through 

extra-legal  or  adventitious  circumstances. 

It  may  be  taken  as  an  axiom  in  political  and 
social  science,  that  in  every  free  country,  where 
no  restraint  is  imposed  on  the  movement  of  in- 

*  By  report  of  the  Secretary  of  the  State  of  Massa- 
chusetts, February  11,  1870,  the  whole  number  of  legal 
voters  in  that  State  was  returned  at  262,120,  of  whom 
111,632  (or  forty-two  per  cent.)  paid  only  a poll-tax ; 
the  same  having  no  taxable  property  beyond  what 
was  exempted  from  taxation  by  law.  The  exemptions 
from  taxation  by  the  statutes  of  Massachusetts  are 
household  furniture,  not  in  excess  of  $1000  in  value  ; 
tools  and  implements  of  trade  of  a value  not  exceed- 
ing $300  ; and  the  property  of  unmarried  women  to 
the  extent  of  $500,  when  the  whole  real  and  personal 
estate  of  such  persons  is  not  valued  in  excess  of  $1000. 
Also  cattle  and  horses  less  than  a year  old. 


dividuals,  and  where  no  inquisition  of  the  per- 
son or  of  the  domicile  is  tolerated,  except  upon 
accusation  of  crime  and  legal  warrant,  no  law, 
however  just,  can  be  fully  and  permanently  exe- 
cuted which  is  in  opposition  to  any  consider- 
able public  sentiment,  or  which  in  itself  con- 
tains extraordinary  inducements  for  its  violation. 
And  especially  is  this  the  case  with  laws  impos- 
ing taxes,  in  respect  to  which  the  general  public 
sentiment  is  always  in  a degree  instinctively  in 
antagonism  with  the  State.  Of  examples  in  sup- 
port of  this  position,  the  inability  of  the  Govern- 
ment to  collect  a tax  of  two  dollars  per  gallon 
on  distilled  spirits  may  be  cited;  and  upon  no 
other  principle  than  a general  dislike  to  the  in- 
quisition and  exposure  involved  in  the  execu- 
tion of  the  law  can  we  explain  the  present  al- 
most universal  sentiment  of  the  country  in  favor 
of  the  abolition  of  the  income  tax ; which,  out 
of  a population  of  thirty-nine  millions,  has  never 
been  assessed  on  as  many  as  five  hundred  thou- 
sand individuals,  belonging  exclusively  to  the 
wealthier  and  most  prosperous  classes. 

The  investigations  of  the  commissioners  have 
furnished  many  other  examples  of  this  limita- 
tion of  the  power  of  the  State  in  respect  to  taxa- 
tion, through  what  may  be  called  the  instinctive 
resistance  of  individuals,  and  for  which  resist- 
ance, as  before  intimated,  there  are  no  practical 
remedies,  without  such  a personal  inquisition  and 
restraint,  as  is  incompatible  with  a free  govern- 
ment. Some  of  the  most  curious  of  these  may 
be  mentioned  : Thus  in  Pennsylvania,  the  State 
imposes  an  annual  tax  of  one  dollar  upon  watches 
of  gold  ; seventy-five  cents  upon  watches  of  sil- 
ver, and  fifty  cents  upon  those  of  other  material ; 
but  how  completely  the  law  fails  in  its  execution 
is  shown  by  the  fact,  that  in  Philadelphia,  out 
of  a population  of  657,000,  and  an  individual 
assessment  of  161,000,  the  assessors  for  1869-70 
could  find  but  12,871  watches ; 1 1,939  gold,  903 
silver,  and  49  of  other  material,  the  last  yielding 
a revenue  of  $24.50.  And  yet  this  ridiculous 
assessment  continues  to  be  kept  up  as  a part  of 
an  enlightened  system  of  taxation. 

The  amount  of  property  which  escapes  taxa- 
tion, in  all  or  in  degree,  through  a change  of  resi- 
dence of  the  owner,  and  which  the  law  is  power- 
less to  prevent,  is  also  very  considerable.  The 
testimony  of  nearly  all  of  our  recent  diplomatic 
officers  and  consuls  has  been  to  the  effect,  that 
during  the  last  five  years  Europe  has  swarmed 
with  Americans,  whose  object  in  expatriation 
has  been  in  great  part  a desire  to  escape  the  pay- 
ment of  the  income  and  other  taxes ; and  in 
1868  a memorial  was  addressed  to  the  Treasury 
Department  from  a consular  office  in  Europe, 
asking  that  he  might  be  authorized  to  act  as  an 
internal  revenue  officer  to  collect  the  income  tax 
from  Americans  residing  in  his  district ; and 
representing  that  an  amount  of  revenue  greater 
than  that  derived  from  this  tax  in  many  of  the 
prosperous  States  of  the  Union  might  without 
difficulty  be  collected. 

During  the  past  year  the  city  of  Boston,  while 
increasing  the  number  of  her  taxable  polls  by 


LOCAL  TAXATION. 


51 


2G84,  experienced  a decrease  in  the  valuation  of 
her  personal  property  to  the  extent  of  $6,452,900; 
a good  part  of  which  was  undoubtedly  due  to  a 
change  of  residence  on  the  part  of  her  wealthy 
citizens  in  order  to  escape  taxation.  Where 
those  who  leave  the  city  of  Boston  to  escape 
taxation  found  a residence  in  part,  is  clearly  in- 
dicated by  the  comparative  returns  of  the  valua- 
tion of  personal  property  in  the  town  of  Nahant ; 
a place  which,  as  well  known,  is  by  nature  almost 
incapable  of  producing  any  thing,  and  which  has 
no  manufactories.  In  1865  the  total  official 
valuation  of  the  personal  property  of  Nahant  was 
$12,710 ; in  1867  it  had  increased  to  $274,167 ; 
in  1869  to  $1,982,088,  and  in  1870  to  $4,1 60, 103. 
The  rate  of  tax  in  this  town,  for  all  purposes, 
during  the  year  1869  was  less  than  the  half  of 
one  per  centum.  The  following  story  told  of  a 
wealthy  citizen  of  Boston  is  given  by  the  com- 
missioners, not  as  true,  for  they  have  the  assur- 
ance of  the  assessors  of  Boston  that  it  is  not  so 
in  the  main ; but  as  illustrating,  whether  true 
or  false,  and  better  than  any  argument,  the  facili- 
ties that  are  always  open  to  an  individual  for 
evading  taxation  on  his  incorporeal,  intangible, 
personal  property,  in  case  he  has  a determination 
so  to  do.  The  individual  is  reputed  as  having 
notified  the  assessors  that  in  case  his  taxes — 
some  $30,000 — were  increased,  he  would  leave 
Boston  and  take  up  his  residence  in  the  town 
of  his  nativity,  an  interior  country  place  of 
sparse  population  and  little  property.  The  as- 
sessors paying  no  attention  to  the  notification, 
the  gentleman  put  his  threat  into  execution,  and, 
on  changing  his  residence,  is  said  to  have  noti- 
fied the  little  town  authorities  that  if  they  would 
inform  him  of  the  total  annual  liabilities  of  the 
town  for  taxes,  he  would  alone  furnish  the  money 
for  their  payment ; an  act  which  he  could  well 
afford  to  do,  inasmuch  as  the  aggregate  taxes  of 
the  town  were  not  quite  equal  to  one-half  of  the 
sum  at  which  he  had  been  assessed  as  a citizen 
of  Boston.  Massachusetts  has  endeavored  to 
remedy  this  s.tate  of  things  by  providing  that 
when  a person  changes  his  domicile,  he  shall 
not,  until  making  a sworn  exhibit,  be  taxed  on 
any  less  amount  of  personal  property  than  he 
was  last  assessed  for  in  the  place  of  former  resi- 
dence ; but  it  is  evident  that  such  a provision 
can  be  only  imperfectly  effective. 

In  one  of  the  cities  of  New  York  the  assessors 
frankly  informed  the  commissioners  that  they 
had  tried  the  plan  of  assessing  wealthy  citizens 
at  an  approximately  full  valuation  for  personal 
property,  and  finding  the  result  uniformly  one 
of  detriment  to  the  city,  had  desisted,  and  now 
taxed  such  persons  for  a uniform  moderate 
amount  without  regard  to  any  valuation.  Ex- 
perience had  shown  that  a tax  on  full  valuation 
was  never  paid  by  such  citizens  but  once,  for  be- 
fore a new  assessment  they  had  sold  their  prop- 
erty and  changed  their  residence  to  some  other 
State  or  town,  where  the  valuation  or  rate  was 
different.  One  instance,  in  particular,  was  re- 
ferred to,  where  an  assessment  was  recently 
made  for  $4,000,000  personal  property.  The 


individual  in  question  swore  down  the  valuation 
to  $1,000,000,  paid  taxes  on  that  to  the  extent 
of  four  per  cent.,  and  left  the  county. 

Another  expedient  for  evading  taxes  on  per- 
sonal property  brought  to  the  notice  of  the  com- 
missioners is  worthy  of  notice  for  its  ingenuity. 
A firm  engaged  in  manufacturing,  with  a capi- 
tal of  between  two  and  three  hundred  thousand 
dollars,  found  the  rate  of  taxation  to  which  the 
same  was  subjected  too  onerous  and  too  de- 
structive of  profit  to  be  endured.  The  estab- 
lishment was  therefore  closed  up  and  sold  out 
under  a legal  process,  and  bought  in  by  the 
original  owners  and  reorganized,  under  the 
manufacturing  law,  with  a nominal  capital  of 
fifty  thousand  dollars,  on  which  capital  it  is  to- 
day valued  and  assessed.  The  same  thing  in 
principle  is  reported  of  many  other  firms  and 
corporations,  who,  with  the  extension  of  their 
business  and  increase  in  its  value,  never  increase 
their  original  nominal  capital,  and  return  such 
only  as  the  basis  of  assessment,  while  their  true 
capital  as  represented  by  assets  and  good  will  is 
really  ratable  at  a much  larger  figure. 

GENERAL  DEDUCTIONS. 

The  lesson  of  all  of  these  examples  is,  that  if 
we  are  to  have  an  effective  and  equitable  system 
of  taxation,  the  State  must  not  attempt  to  tax 
property  which  from  its  very  nature  is  intangi- 
ble, incorporeal,  beyond  control;  and  whose 
situs  is  a matter  about  which  the  laws  conflict 
rather  than  agree. 

The  facts  and  statements  submitted  also  make 
clear  that  of  the  personal  property  of  the  State 
of  New  York,  the  following  descriptions  or 
classes  are  already  exempt  from  taxation  or  be- 
yond the  jurisdiction  of  the  State  for  such  pur- 
poses : I.  Imported  goods,  in  original  packages. 

2.  Bonds,  notes,  and  securities  of  the  United 
States.  3.  Visible  personal  property  of  citizens 
of  the  State  located  without  the  State.  4.  Prop- 
erty brought  within  the  territory  of  the  State  for 
sale.  5.  Deposits  in  savings  banks.  6.  Per- 
sonal property  represented  by  indebtedness ; 
custom  and  the  temptation  for  evading  taxation, 
including  under  the  head  constructive  as  well  as 
actual  indebtedness.  7.  Personal  property  of 
citizens  of  the  State  in  the  hands  of  trustees  re- 
siding without  the  territory  and  sovereignty  of 
the  State. 

Of  property  whose  taxation  by  the  State  in- 
volves the  exercise  of  doubtful  powers,  we  have  : 
1.  Mortgage  bonds,  or  evidences  of  indebtedness 
created  by  different  States  or  corporations  of 
such  State,  and  over  which  another  State  sover- 
eignty is  claimed  and  exercised.  2.  Negotia- 
ble instruments,  the  property  of  citizens  of  New 
York  having  an  actual  situs  without  the  State. 

3.  Ships  belonging  to  citizens  of  the  State,  but 
registered  without  the  State. 

If  to  this  enumeration  we  add  mortgages  of 
real  estate,  the  exemption  of  which  from  taxa- 
tion it  would  seem  that  self-interest  and  the  leg- 
islation of  other  States  would  at  no  distant  day 
render  imperative,  there  is  little  else  left  avail- 


52 


LOCAL  TAXATION. 


able  of  the  personal  property  of  the  State  for 
taxation,  except  banking  capital,  railroad  and 
other  transportation  companies’  stocks,  house- 
hold furniture,  and  the  capital  and  machinery 
of  manufacturers,  firms,  or  corporations,  the  tax- 
ation of  which  last  generally,  if  it  can  be  avoid- 
ed, is  always  impolitic,  inasmuch  as  such  taxa- 
tion always  and  immediately  enhances  the  cost 
of  production,  and  falls  directly  upon  consum- 
ers, who  are  often  of  a class  that  are  least  able 
to  bear  it.  And  this  practically,  furthermore, 
is  what  the  present  New  York  State  system  of 
taxing  personal  property  imperfectly  amounts 
to.  We  say  imperfectly , for  the  present  valua- 
tion of  all  the  personal  property  in  the  State 
for  taxation  is  undoubtedly  less  than  a fair  val- 
uation of  the  capital  of  its  banks,  railroads,  and 
other  corporations,  by  from  two  to  three  hun- 
dred millions. 

PROPOSED  NEW  SYSTEM  OF  TAXATION. 

But  the  Legislature  and  people  of  the  State, 
after  considering  the  analysis  and  review  of  the 
different  existing  systems  of  taxation  as  present- 
ed by  the  commissioners,  may  naturally  respond 
as  follows : 

“We  acknowledge  the  imperfections  of  the 
existing  system.  But  what  other  can  be  pro- 
posed which  will  not  prove  equally  open  to  ob- 
jection ? The  State  and  its  local  governments 
must  have  revenue ; their  financial  necessities 
are  in  no  condition  to  warrant  uncertain  experi- 
ments ; and  the  theoretical  basis  of  the  existing 
system,  that  every  citizen  ought  to  contribute  to 
the  necessities  of  the  State  in  proportion  to  his 
ability,  is  just,  and  ought  to  be  recognized. 
Can  any  thing  better  be  done  than  to  amend 
here  and  there  the  present  laws  and  provide  for 
their  more  efficient  administration  ?”  The  com- 
missioners in  reply  would  answer,  that  they  are 
unqualifiedly  of  the  opinion  that  some  better 
system  than  the  present  one  can  be  devised; 
and  as  the  result  of  much  investigation  would 
submit  the  following  for  consideration  : 

1st.  Provide  for  the  Taxation  of  all  Corpora- 
tions created  by  the  State  which  are  in  the  na- 
ture of  a Monopoly. — Of  such  corporations  the 
gas  company  is  the  type.  It  has  practically  no 
competitor  in  the  town,  city,  or  district  in  which 
it  is  located;  and  the  amount  of  capital  involved, 
the  pre-occupation  of  the  streets,  and  the  certain- 
ty of  disastrous  competition,  opposes  the  estab- 
lishment of  rival  companies.  Under  such  cir- 
cumstances, whatever  taxation  is  imposed  on 
such  companies  is  transferred  to  the  consumer, 
increasing  thereby,  to  some  extent,  the  cost  of 
living  and  production,  but  in  a more  limited  de- 
gree and  with  less  of  burden  than  almost  any 
other  taxes  that  can  be  mentioned,  except  those 
upon  pure  luxuries.  Other  corporations  which 
approximate  in  character  to  the  gas  company 
would  be  the  national  banks  (which  may  be 
taxed  under  the  present  provision  of  the  United 
States  law  through  their  stockholders),  the  State 
banks,  railroad  corporations — steam  and  horse — 
omnibuses,  ferries,  and  bridges. 


Manufacturing  firms  and  corporations,  on  the 
other  hand,  not  being  local  State  monopolies  in 
any  sense,  save  in  the  exceptional  case  of  the 
manufacture  of  certain  patented  articles,  would 
not  be  included  under  this  section  for  taxation. 
Private  bankers  doing  business  in  competition 
with  national  and  State  banks  should  be  taxed 
in  the  same  manner,  which  may  be  done  with- 
out evasion  by  means  of  a tax  in  the  nature  of 
a license.  The  surplus  of  savings  banks  is  also 
a legitimate  subject  for  State  taxation.  Fire 
and  marine  insurance  companies,  and  trust 
companies  can,  in  the  opinion  of  the  commis- 
sioners, be  taxed  moderately  and  without  detri- 
ment by  a tax  on  their  franchise  proportioned 
to  their  capital  and  business. 

The  commissioners  believe  that  on  a true  val- 
uation of  the  property  included  under  the  above 
enumerated  items,  a revenue  might  be  derived, 
at  a fair  rate  of  taxation,  nearly  or  quite  equal 
to  that  now  obtained  from  the  taxes  levied  on 
the  present  valuation  of  all  the  personal  proper- 
ty of  the  State ; and,  furthermore,  that  with  an 
efficient  centralized  supervision  of  this  depart- 
ment of  public  administration,  such  a valuation 
and  revenue  are  perfectly  practicable. 

The  present  system  of  taxing  railroad  proper- 
ty in  the  State  of  New  York  is  as  imperfect  and 
objectionable  as  it  well  can  be.  The  road-bed 
and  the  real  estate  of  the  companies  are  valued 
and  assessed  in  the  different  towns  through 
which  the  line  of  the  road  extends,  according  to 
no  uniform  standard,  but  at  the  discretion,  or 
rather  caprice,  of  the  local  assessors,  from  whose 
decisions  there  is,  practically,  no  appeal.  In 
some  towns  the  standard  of  the  valuation  and 
taxation  of  the  corporation  property  is  reported 
to  depend  on  the  amount  annually  required  to 
defray  the  highway  expenditures  ; and  in  an- 
other recent  instance  the  erection  of  an  expen- 
sive bridge  over  a navigable  stream  was  regard- 
ed by  one  of  the  towns,  on  whose  territory  the 
bridge  abuts,  as  a sufficient  warrant  for  the 
erection  of  a new  school-house.  , In  one  town, 
where  a company  had  substituted  an  expensive 
and  commodious  station-house  for  one  dilapi- 
dated and  inconvenient,  to  the  great  benefit  of 
the  town  and  the  convenience  of  its  citizens,  the 
erection  of  the  building  was  immediately  made 
the  occasion  of  a large  increase  in  the  taxation 
to  which  the  company  was  subjected.  The  ef- 
fect of  this  was,  to  use  the  language  of  our  in- 
formant, “that  we  have  concluded  not  to  re- 
peat, for  the  present,  the  building  of  any  more 
expensive  station-houses  along  the  line  of  our 
road,  but  will  get  along  with  the  cheapest  build- 
ings possible  ;”  or,  in  other  words,  the  action  of 
one  town,  in  respect  to  taxation,  was  made  to 
result  in  detriment  to  all  the  other  towns  on  the 
line  of  the  road,  whose  need  for  elegant  and  im- 
proved station-houses  might  be  equally  or  more 
imperative.  On  the  other  hand,  it  is  alleged 
that  the  railroad  companies  often  endeavor  to 
protect  themselves  from  what  they  conceive  to 
; be  injustice,  by  threat  of  retaliatory  measures, 

1 or  by  actually  putting  such  measures  into  exe- 


LOCAL  TAXATION. 


53 


cution,  as  in  the  case  of  the  rebuilding  of  sta- 
tion-houses mentioned ; and,  furthermore,  that 
the  companies,  after  all,  do  not  pay  in  the  ag- 
gregate, in  the  way  of  direct  taxes,  as  much  as 
would  be  equivalent  to  the  average  rate  imposed  j 
throughout  the  State  on  similar  corporate  prop- 
erty— as  banks,  gas  companies,  and  manufactur- 
ing corporations  ; rolling  stock,  in  their  valua- 
tions, being  classed  as  real  estate,  while  the 
funded  and  floating  debt  is  made  to  offset  and 
neutralize  as  indebtedness  all  valuations  and 
assessments  against  the  companies  for  personal 
property.  During  the  year  1869,  the  aggregate 
taxation  paid  by  the  steam  railroad  corporations 
of  the  State  on  real  estate  amounted,  accord- 
ing to  the  report  of  the  State  Engineer,  to 
$1,565,670.52.  The  capital  stock  of  the  roads 
of  the  State,  paid  in,  and  the  aggregate  of  their 
funded  and  floating  debts  for  the  same  year,  was 
$276,591,433.  It  thus  appears  that  the  amount 
paid  by  the  roads  for  taxes  on  their  real  estate 
(and  no  other  taxes  are  returned)  is  but  little 
more  than  half  of  one  per  centum  on  what  in 
Massaschnsetts,  Connecticut,  and  Ohio  would 
be  considered  a fair  taxable  valuation  of  their 
property.  If  the  same  property  had  paid  the 
average  rate  of  taxation  throughout  the  entire 
State  for  that  year  (2.48  on  the  dollar),  the  ag- 
gregate would  have  amounted  to  $6,859,467.75. 

And  here  it  is  appropriate  to  call  attention 
to  another  of  these  anomalies  in  American  tax- 
ation which  seems  almost  unavoidably  to  lead  to 
the  conclusion  that  one  of  the  avowed  objects 
of  those  who  have  heretofore  framed  the  tax 
laws  of  the  country  has  been  to  create  as  much 
of  confusion,  inconsistency,  and  irregularity  in 
the  subject-matter  as  circumstances  would  ren- 
der possible.  In  New  York,  as  has  been  stated, 
the  real  estate  of  railroads,  including  the  road- 
bed, is  taxed  by  the  several  towns  and  wards 
of  cities  through  which  the  line  of  the  road  ex- 
tends. The  Supreme  Court  of  Massachusetts, 
however,  which  has  had  the  question  before  it 
in  at  least  three  different  forms,  has  uniformly 
decided  that  land  taken  or  purchased  by  rail- 
road corporations  for  their  tracks,  not  exceed- 
ing five  rods  in  width,*  and  land  purchased  in 
fee,  or  otherwise  taken  by  a town  or  city,  by 
authority  of  the  Legislature,  for  strictly  public 
purposes,  is  taken  in  the  exercise  of  the  right  of 
eminent  domain,  and  is  therefore  not  liable  to 
local  taxation.  In  the  case  of  The  Inhabitants 
of  the  City  of  Worcester  vs.  The  Western  Rail- 
road Corporation  of  Massachusetts , the  Supreme 
Court  (Shaw,  C.  J.,  4 Metcalf,  564)  held  that 
the  taxation  by  the  town  of  the  road-bed  of  the 
railroad  lying  within  its  territory  was  illegal,  on 
the  ground  that  the  road  was  a public  work, 

“ established  by  public  authority,  intended  for 
the  public  use  and  benefit,  the  use  of  which  is  se- 


* In  Massachusetts,  the  amount  of  land  authorized- 
to  be  taken  by  railroads  for  track  purposes  has  been 
live  rods  in  width.  In  New  York,  the  general  railroad 
law  (April  2, 1S50)  authorizes  railroads  to  take  six  rods 
for  their  roadway,  and  “ as  much  more  land  as  may 
be  necessary  for  the  proper  construction  and  security 
of  the  road.”  I 


cured  to  the  whole  community,  and  constitutes, 
therefore,  like  a canal,  turnpike,  or  highway,  a 
public  easement.”  “The  only  principle,”  con- 
tinued the  Court,  “ on  which  the  Legislature 
could  have  authorized  the  taking  of  private  prop- 
erty for  its  construction,  without  the  owner’s 
consent,  is,  that  it  was  for  the  public  use.  It 
is  true  that  the  real  and  personal  property  nec- 
essary to  the  establishment  and  management  of 
the  railroad  is  vested  in  the  corporation  ; but 
it  is  in  trust  for  the  public.  The  company  have 
not  the  general  power  of  disposal  incident  to 
the  absolute  right  of  property  ; they  are  obliged 
to  use  it  in  a particular  manner  and  for  the  ac- 
complishment of  a well-defined  public  object ; 
and  they  are  required  to  render  frequent  ac- 
counts of  their  management  of  the  property  to 
the  agents  of  the  public.  Treating  the  rail- 
road, then,  as  a public  easement,  the  works 
erected  by  the  corporation  as  public  works  in- 
tended for  public  use,  we  consider  it  well  estab- 
lished that,  to  some  extent  at  least,  the  works 
necessarily  incident  to  such  public  easement  are 
public  works,  and,  as  such,  exempted  from  taxa- 
tion. Such,  we  believe,  has  been  the  uniform 
practice  in  regard  to  highways  and  their  inci- 
dents ; and  also  in  regard  to  public  buildings, 
as  State-houses,  forts,  arsenals,  court-houses, 
jails,  town-houses,  school-houses,  and  general- 
ly to  houses  appropriated  specially  to  public 
use.” 

It  is  scarcely  necessary  to  remark,  in  refer- 
ring to  this  decision,  that  it  is  for  the  Legisla- 
ture of  a State  to  determine,  in  the  first  instance, 
what  may  be  regarded  as  a public  use  ; but  in 
New  York  the  laws  defining  what  property,  by 
reason  of  its  public  use,  shall  be  exempt  from 
taxation  are  almost  the  same  as  those  of  Massa- 
chusetts ; embracing  all  property  of  the  State, 
public  highways  and  canals,  turnpike  and  plank 
roads  under  certain  circumstances;  houses  of 
worship,  school-houses,  jails,  court-houses,  pub- 
lic libraries,  lands  of  agricultural  societies,  etc. 

Massachusetts,  therefore,  in  conformity  with 
the  above  decision  of  her  courts,  exempts  the 
road-beds  of  her  railways  and  the  structures 
thereon  from  all  local  taxation,  and,  taking  the 
whole  subject  of  railroad  valuation  and  assess- 
ment into  her  exclusive  control  as  a State,  tax- 
es, as  already  shown,  at  the  average  rate  of  the 
State,  the  corporate  franchise  at  a valuation 
equal  to  the  aggregate  value  of  the  shares  of  the 
capital  stock,  less  the  value  of  such  real  estate 
as  is  owned  by  the  corporation  and  not  exempt 
from  local  taxation. 

Connecticut  adopts,  also,  a similar  plan,  and 
imposes  a tax  of  one  per  cent,  on  an  aggregate 
made  up  of  a market  valuation  of  the  shares  of 
the  roads,  and  of  their  funded  and  floating  debt, 
less  cash  on  hand — this  last  provision  being  re- 
garded as  offsetting  all  that  portion  of  the  float- 
ing debt  not  likely  to  be  rendered  permanent. 
In  both  Massachusetts  and  Connecticut,  the 
stocks,  bonds,  and  other  personal  property  of 
the  railroad  corporations  are  exempted  from 
any  further  liability  to  make  returns  and  pay 


54 


LOCAL  TAXATION. 


taxes  within  the  State.  Massachusetts  appor- ; 
tions  the  railroad  taxes  received  among  the 
towns  of  the  State  where  the  stockholders  re- 
side, paying  directly  into  the  treasury  those  of 
non-residents.  Connecticut  appropriates  to 
State  purposes  the  whole  amount  of  taxes  thus 
received. 

The  commissioners  are  of  opinion  that  the 
interests  of  New  York  would  be  subserved  if  the 
State  should  follow  the  example  of  Massachu- 
setts and  Connecticut,  and  take  the  taxation  of 
her  railroad  corporations  exclusively  under  her 
control ; authorizing  the  Comptroller,  or  other 
designated  officer,  to  assess  annually,  at  a given 
rate,  the  corporate  franchise,  at  a valuation 
equal  to  the  aggregate  market  value  of  its 
stocks  and  funded  and  floating  debt,  less  cash 
on  hand ; and  that,  in  consideration  therefor, 
the  said  corporations  be  exempt  from  all  other 
taxation.  The  taxes  so  received  could  be 
credited  on  account  of  State  taxes,  or  paid  di- 
rect to  the  several  towns  and  cities  through 
which  the  line  of  the  road  passes,  in  proportion 
to  an  equalized  valuation  of  the  property  of  the 
corporation  within  the  separate  territorial  lim- 
its ; or  be  passed,  without  reserve,  to  the  State 
Treasury,  and  used  in  defraying  State  expendi- 
tures. As  the  corporate  franchise  of  every  rail- 
road has  been  granted  in  the  name  and  by  the 
authority  of  all  the  people  of  the  State,  and  as 
every  town  or  city  through  which  a line  of  road 
runs  has  had  the  valuation  of  its  property,  and 
the  trade  and  convenience  of  its  citizens,  in- 
creased by  reason  of  the  road’s  construction,  the 
latter  method  of  disposing  of  the  revenue  de- 
rived from  taxing  railroads,  would  seem  to  be 
the  fairest  and  most  equitable. 

2d.  The  second  provision  of  the  plan  of  taxa- 
tion recommended  by  the  commissioners  would 
be,  to  tax  land  exclusive  of  buildings  at  a uni- 
form valuation  of  fifty  per  centum  of  its  true 
marketable  or  fair  value. 

It  is  obviously  immaterial,  so  far  as  equity 
is  concerned,  what  standard  of  valuation  is 
adopted  for  any  given  class  of  property,  provided 
that  the  standard  be  uniform ; but  the  reasons 
for  recommendingi^/?y  per  centum , or  some  val- 
uation less  than  a full  one,  are  connected  with 
the  next  and  third  provision  of  the  proposed 
system  of  the  commissioners. 

3d.  In  what  has  preceded,  the  commissioners 
claim  that  they  have  demonstrated  the  incon- 
sistency, inexpediency,  and  unconstitutionality 
or  illegality  of  many  of  the  existing  laws  impos- 
ing taxes  directly  on  personal  property ; and 
also  the  uniform  failure  of  the  system,  as  a 
whole,  wherever  it  has  been  adopted.  The  an- 
swer generally  made,  however,  to  any  proposi- 
tion to  do  away,  as  all  other  nations  have  done, 
with  such  a system,  is,  that  it  is  right  that  all 
persons  and  all  property  should  bear  a propor- 
tionate burden  of  the  necessities  of  the  State; 
and  that  although  all  that  the  commissioners 
have  alleged  may  be  true,  yet  a considerable 
amount  of  taxes  are  collected  under  any  circum- 
stances from  personal  property ; and  that,  to  j 


; the  extent  to  which  they  are  collected,  the  bur- 
den is  proportionally  lightened  on  real  estate. 
The  problem  presented  for  solution,  therefore, 
is — Can  the  present  imperfect  system  be  done 
away  with,  and  personal  property  at  the  same 
time  be  made  to  sustain  its  equitable  and  pro- 
portionate share  of  the  public  burdens  ? 

To  this  the  commissioners  reply  unqualifiedly 
in  the  affirmative,  and  for  the  following  rea- 
sons : 

Every  person  possessed  of  personal  property, 
unless  he  convert  such  property  into  money  and 
refrains  from  all  use  of  it,  affords  some  sign  or 
index  of  its  possession. 

In  England,  France,  Belgium,  and  Holland 
(in  all  of  which  countries,  at  the  commence- 
ment of  the  seventeenth  century,  the  same  sys- 
tem of  indiscriminate  and  universal  taxation 
for  local  purposes  now  existing  in  the  United 
States  prevailed  in  a greater  or  less  degree), 
experience,  gained  through  years  of  practice, 
and  assisted  by  a despotic  administration,  has 
led  to  the  conclusion  that  the  rental  value  of 
houses  or  other  occupied  buildings  is  the  most 
certain  index  of  the  value  of  the  personal  estate 
of  the  owners  or  occupiers,  and  is  also  the  best 
measure  of  an  individual’s  income  and  ability  to 
pay  taxes  that  can  be  adopted.* 

The  commissioners,  convinced  by  their  in- 
vestigations that  the  experience  of  the  countries 
old  in  civilization,  before  mentioned,  is  a true 
and  legitimate  experience,  and  that  the  rule  and 
practice  which  have  resulted  from  it  are  equally 
applicable  to  the  condition  of  affairs  in  the  State 
of  New  York,  would  accordingly  propose,  as  the 
third  provision  of  their  new  system,  one  of  the 
two  following  plans  for  equitably  taxing  person- 
al property,  or  for  obtaining  a more  than  sub- 
stantial equivalent  for  the  taxation  now  im- 
posed on  such  property : 

1.  Tax  the  house  or  building  as  real  estate 
separately , at  the  same  rate  of  valuation  as  the 
land , that  is,  fifty  per  cent.;  and  then , assuming 
that  the  value  of  the  house  or  building , irrespect- 
ive of  its  contents , be  such  contents  furniture , 
machinery , or  any  other  chattels  whatsoever , is 
the  sign  or  index  which  the  owner  or  occupier  puts 
out ■ of  his  personal  property , tax  the  house  or 
building  on  a valuation  of  fifty  per  cent,  addi- 
tional to  its  real  estate  valuation , as  the  repre- 
sentative valuation  of  such  personal  property ; or, 
in  other  words,  tax  the  land  separately  on  fifty 

* It  is  also  an  interesting  fact,  and  appropriate  for 
notice  in  this  connection,  that  the  discontinuance  of 
the  direct  taxation  of  personal  property  in  Great 
Britain  was  not  in  the  outset  the  result  of  any  specific 
legislative  action,  but  that  it  came  about  gradually, 
through  decisions  of  the  courts,  which  one  after  an- 
other (as  the  courts  of  the  United  States,  as  already 
shown,  are  now  doing)  exempted  certain  classes  of 
property  from  liability  to  taxation,  national  or  local. 
One  of  the  earliest  and  most  important  of  these  decis- 
ions was  rendered  by  Lord  Mansfield,  denying  the 
right  to  tax  directly,  as  personal  property,  investments 
in  the  public  funds  (consols),  a decision  which  was 
followed  by  others,  until  the  list  of  personal  property 
subject  to  taxation  was  so  limited  that  further  assess- 
ments upon  all  property  of  this  character  was  sus-  t 
pended  by  Parliament— a suspensiou  even  now  peri- 
odically renewed,  as  the  period  of  limitation  previous- 
! ly  fixed  by  law  terminates. 


LOCAL  TAXATION. 


oo 


per  cent,  of  its  fair  marketable  valuation,  and 
tax  the  building  apart  from  the  land,  as  repre- 
senting the  owner’s  personal  property,  on  a full 
valuation. 

Or,  as  a substitute  for  the  above  plan,  the  fol- 
lowing : 

1st.  Corporations  to  be  taxed  as  provided  in 
the  above  system. 

2d.  Tax  buildings  conjointly  with  land  as  real 
estate  at  a uniform  valuation;  and  then , as  the 
equivalent  for  all  taxation  on  personal  property , 
tax  the  occupier , be  he  owner  or  tenant  of  any 
building  or  portion  of  any  building  used  as  a 
dwelling , or  for  any  other  purpose , on  a valuation 
of  three  times  the  rental  or  rental  value  of  the 
premises  occupied.  Tenement -houses  occupied  by 
more  than  one  family , or  tenement-houses  having  a 
rental  value  not  in  excess  of  a fixed  sum , to  be 
taxed  to  the  owner  or  occupier. 

All  personal  property  not  embraced  under  one 
of  the  above  systems  to  be  entirely  exempt  from 
all  taxation. 

In  Great  Britain  and  France,  where  this  lat- 
ter system  in  some  of  its  features  prevails,  the 
tenant  is  made  responsible  for  all  arrears  of  tax- 
es on  the  premises  occupied.  The  consequence 
is,  that  no  person  will  buy  or  lease  a building 
until  he  has  received  a warranty  that  it  is  free 
from  all  tax  incumbrances ; and  owners  and 
landlords  thereby  become  in  a measure  tax-col- 
lectors. 

To  recognize  clearly  the  principle  on  which 
these  two  systems  are  founded,  it  is  necessary 
to  recur  back  to  the  proposition  laid  down  and 
demonstrated  in  the  previous  part  of  this  report, 
viz.  : 

That  the  market  value  of  real  estate  is  always 
proportional  to,  and  dependent  on,  the  amount 
of  personal  property,  or  rather  productive  cap- 
ital, placed  upon  it,  or  in  its  immediate  vicin- 
ity. Land  in  itself  has  originally  no  value,  as 
it  cost  nothing  to  any  man  to  produce  it.  If 
there  is  no  personal  property  or  productive  cap- 
ital connected  with  it,  or  reflected  on  it,  it  will 
not  sell  in  the  market,  or  at  only  a nominal  val- 
ue. If  by  chance  any  buildings  should  be  con- 
nected with  such  land,  they  will  possess  no  rent- 
al value.  Only  as  personal  property  or  produc- 
tive capital  is  brought  in  connection  with  real 
estate  does  its  value  become  appreciable  and 
augment. 

Applying,  practically,  to  New  York  the  pro- 
posed system  for  taxing  personal  property 
through  buildings  or  rentals  as  its  representa- 
tive, we  should  find  that  the  aggregate  of  tax- 
ation would  be  the  lowest  in  the  most  sparse- 
ly settled  agricultural  districts  of  the  State. 
Property  here  is  mainly  in  land,  whose  low 
marketable  valuation  would  be  still  further  re- 
duced on  the  tax-list,  if  a valuation  of  fifty  per 
cent,  was  taken  as  the  standard  for  assessment. 
The  marketable  value  of  the  buildings  is  small 
also ; and  what  should  be  especially  borne  in 
mind  is  this  circumstance,  that  here,  and  in  fact 
in  all  the  agricultural  districts,  the  value  of  the 
buildings  is  generally  much  less  than  the  value  of  this 


land  with  which  they  are  connected.  As  we  leave 
the  sparsely  settled  agricultural  districts,  and 
rise  through  the  more  densely  populated  por- 
tions of  the  State,  from  the  villages  to  the  towns, 
from  the  towns  to  the  cities,  and  from  the  cities 
to  the  great  metropolis  of  the  continent,  we 
shall  find  that  the  value  of  land,  of  buildings, 
and  the  aggregate  of  taxable  valuation  will  in- 
crease, as  the  amount  and  accumulation  of  per- 
sonal property  increases,  until  land  and  build- 
ings attain  their  greatest  market  and  tax  valua- 
tion in  Wall  Street,  Broadway,  and  Fifth  Ave- 
nue, where  the  accumulation  of  personal  prop- 
erty is  the  greatest.  It  is  also  to  be  observed, 
that,  starting  at  the  bottom  of  our  scale,  with 
the  value  of  land  greatly  in  excess  of  the  value 
of  the  buildings  connected  with  the  land,  this 
difference,  as  we  progress  upward  through  the 
more  densely  populated  districts,  gradually  di- 
minishes, until,  as  is  the  case  very  frequently  in 
the  cities,  the  value  of  the  building  greatly  exceeds 
the  value  of  the  land  in  which  it  is  situated. 

And  yet,  while  under  the  proposed  system 
the  agricultural  districts  would,  as  now,  pay  the 
smallest  proportion  of  the  aggregate  taxes,  and 
the  towns  and  cities,  as  now  also,  the  largest, 
there  would  be  no  injustice,  but,  on  the  contra- 
ry, one  uniform  equitable  rule  of  valuation  and 
assessment 

The  sum  of  three  times  the  rent  or  rental 
value  is  taken  as  the  basis  of  the  valuation  of 
personal  property,  in  the  second  proposition, 
on  the  assumption  that  this  is  the  minimum 
amount  of  personal  property  owned  or  in  posses- 
sion of  the  occupier  of  the  building.  The  as- 
sumption is,  however,  to  some  extent  arbitrary, 
and  can  be  increased  or  diminished  as  circum- 
stances or  the  necessities  of  the  State  may  seem 
to  warrant. 

CONSIDERATION  OE  OBJECTIONS. 

Some  objections  to  the  proposed  system  may 
be  anticipated.  It  may  be  urged  that  the  as- 
sessing of  buildings  at  their  cost  or  full  cash 
value,  or  their  occupiers  on  their  rental,  “would 
be  in  effect  offering  a premium  for  tame  archi- 
tecture and  cheap  structures  of  all  kinds,  and 
prescribing  a penalty  for  expending  money  in 
costly  buildings  and  ornamental  architecture.” 
To  this  it  may  be  replied,  that  so  long  as  the 
demand  and  scarcity  of  active  capital  continue 
so  exceptional  as  at  present  in  this  country,  any 
tendency  to  check  extravagance  in  its  expendi- 
ture, or  its  unproductive  investment,  is  not  to  be 
regretted.  But  that  the  proposed  system  of  tax- 
ation is  likely  to  exert  any  such  effect  in  a mark- 
ed degree  the  commissioners  do  not  believe ; in- 
asmuch as  there  is  nothing  in  which  wealth  so 
instinctively  seeks  to  display  itself  as  in  orna- 
mentation, both  of  person  and  estate.  And  the 
more  expensive  the  ornamentation  the  more  it 
seems  to  be  desired.  The  possessor  of  wealth 
generally  does  not  deny  himself  the  luxuries 
and  comforts  that  wealth  brings  — expensive 
furniture,  works  of  art,  conveniences  of  living 
— but  to  put  these  into  a cheap  house  or  build- 


56 


LOCAL  TAXATION. 


ing  would  be  similar  to  putting  a patch  of  new 
cloth  upon  an  old  garment. 

Again,  “personal  property,”  as  has  been  re- 
marked, “ is  something  more  than  a piece  of 
paper,  and  in  its  value  and  essence  must  be 
something  which  has  its  origin  in  positive 
value.  Accepting  this  principle,  how  can  per- 
sonal property  be  housed  or  guarded  anywhere 
except  upon  real  estate — buildings  or  land? 
The  more  valuable  the  property  to  be  thus 
housed  and  guarded,  the  more  valuable  the 
rental  value,  and  the  greater  the  proportion  of 
taxation  to  which  it  is  subjected.  Establish- 
ments that  sell  high-priced  articles  of  luxury, 
jewelry,  plate,  costly  furniture  or  fabrics,  can 
not  be  located  in  cheap  and  obscure  places,  but 
must  necessarily  seek  the  most  conspicuous  and 
expensive  locations;  and,  paying  the  highest 
rentals,  will  necessarily  pay  the  highest  taxes.”* 

The  case  of  an  individual  may  be  also  refer- 
red to,  who  has  no  lands  or  buildings,  but  large 
personal  property,  and  who  lives,  perchance,  in 
a hotel,  boarding-house,  or  some  cheap  apart- 
ment. Would  you  exempt,  it  may  be  asked, 
such  a person  from  all  direct  taxation  ? As 
the  case  thus  supposed,  and  under  varying  cir- 
cumstances, is  an  important  one,  from  its  bear- 
ing on  the  principle  of  taxation  involved  in  this 
discussion,  it  is  proposed  to  examine  it  some- 
what in  detail. 

If  the  property  of  the  individual  is  Invested 
in  those  great  repositories  of  personal  property, 
banks  and  railroads,  within  the  State,  or  in  gas 
companies,  such  property  would  be  taxed  in  full 
under  the  first  provision  of  either  of  the  proposed 
systems.  If  they  are  invested  without  the  State 
in  a similar  manner,  they  would  be  taxed  under 
another  sovereignty;  and  to  tax  them  again  in 
New  York  wrould  be  double  taxation,  the  uncon- 
stitutionality of  which  the  United  States  Su- 
preme Court  has  affirmed,  and  the  inequity  of 
which  no  one  will  deny. 

If  the  property  is  invested  in  United  States 
bonds,  or  other  securities  exempt  by  law  from  as- 
sessment, the  individual  would  escape  direct  taxa- 
tion on  the  bonds  in  New  York,  under  the  new 
system,  as  he  does  now  under  the  existing  sys- 
tem ; and  as  he  would  under  any  circumstances. 
But  he  could  not  escape  indirect  taxation.  The 
idea  that  owners  or  occupiers  of  land  or  buildings 
pay  exclusively  the  taxes  upon  such  property  is 
a fallacy  long  ago  exploded.  If  an  individual 
occupies  a building  simply  for  the  purpose  of 
living,  and  derives  his  support  from  the  income 
of  invested  property,  he  will  undoubtedly  fin’d  it 
very  difficult  to  transfer  the  taxes  assessed  upon 
such  real  estate  to  any  other  person.  But  if  the 
land  and  building  are  occupied  for  business  pur- 
poses, as  for  a farm,  factory,  store,  or  hotel,  the 
rent  and  taxes  become  a part  and  parcel  of  the 
expenses  of  such  business,  and  are  paid  wholly 
by  the  purchasers  or  consumers.  That  this 
must  be  so  is  evident,  if  we  consider  that  the 
moment  real  estate  becomes  a tax  to  the  own- 

*  Hon.  S.  Townsend,  Debates  New  York  Constitu- 
tional Convention,  1867-3,  p.  19S0. 


er,  over  and  above  what  he  realizes  from  it,  be 
it  pleasure  or  profit,  that  moment  it  loses  its 
value,  and  the  owner  or  lessee  will,  if  he  can  do 
no  better,  abandon  it.  In  short,  every  individ- 
ual, no  matter  where  or  how  his  property  is  in- 
vested, who  lives  anywhere  within  the  State,  or 
purchases  from  its  citizens  any  article  or  serv- 
ice, would  pay,  under  the  proposed  system, 
more  perfectly  than  under  any  other,  a propor- 
tionate share  of  the  expenses  which  the  body 
politic  requires  for  its  maintenance  and  admin- 
istration. 

But  suppose  the  individual  to  hold  his  prop- 
erty exclusively  in  money  or  negotiable  instru- 
ments, promissory  notes,  mortgages,  etc.,  and, 
occupying  premises  at  a low  rental,  subsists 
upon  the  merest  pittance  ; is  his  property  to  be 
exempt  from  direct  taxation  ? 

The  answer  to  this  is,  1st,  that  there  are  few 
such  persons  comparatively ; and,  2d,  that  if 
an  individual  is  determined  to  escape  direct 
taxation,  it  is  perfectly  within  his  power  to  do 
so.  He  may,  for  example,  invest  in  United 
States  bonds  ; in  real  estate  mortgages  as  a res- 
ident of  Pennsylvania  and  New  Jersey,  which 
are  free  from  taxation ; or  in  Connecticut, 
where  the  mortgagee  may  by  law  add  the  tax- 
es to  the  rate  of  interest ; or  in  ground-rents, 
a recognized  principle  of  which  often  is,  that 
all  taxes  on  the  property  shall  be  paid  by  the 
occupier. 

But  assuming,  even,  that  the  State  could  at 
once  lay  hold  of  and  assess  directly  a money 
property,  it  admits  of  complete  demonstration 
that  the  owner  would  fully  compensate  himself 
for  all  taxes  that  may  be  taken  from  him. 
There  is  to-day  a law  upon  the  statute-book  of 
New  York  against  usury,  or  taking,  directly  or 
indirectly,  more  than  the  lawful  rate  of  inter- 
est, more  stringent  and  barbarous  than  is  to 
be  found  in  any  other  State  or  country.  There 
is  another  law  of  the  State  which  imperatively 
requires  that  all  money  loaned  at  interest  shall 
be  assessed  to  the  owner  at  the  local  rate  at  the 
place  of  his  residence.  The  commission  have 
now  a right  to  assume  that,  as  the  Legislature 
refuses  to  repeal  or  change  these  laws,  they  are 
obeyed ; else  the  State  authority  is  defied  and 
the  law  brought  into  contempt. 

But  if  these  laws  are  obeyed  and  enforced, 
what,  may  be  asked,  is  the  rate  of  interest  in 
the  principal  centres  of  business  to-day  in  the 
State  of  New  York  ? Manifestly,  the  legal  rate 
of  seven  per  cent.,  less  the  local  rate  of  taxation 
on  the  money  loaned.  Now  the  local  rate  of 
taxation  for  the  current  year  in  the  cities  of 
New  York,  Brooklyn,  and  Albany  being  re- 
spectively 2.27,  3.87,  and  4.57,  it  follows  that 
the  return  for  money  loaned  in  each  of  these 
cities  should  be  also  respectively  4.73,  3.13,  and 
2.43  per  cent. ; and  in  the  city  of  Kochester, 
where  the  present  local  rate  is  6.70,  the  profit 
of  the  lender  of  capital  should  be  only  three- 
tenths  of  one  per  cent.  The  commissioners 
would  respectfully  ask  if  any  person  is  known 
who  in  the  State  of  New  York  lends  money  at 


LOCAL  TAXATION. 


57 


any  such  compensation  ? and  if  there  are  none 
such,  then  one  of  two  things  is  certain  : either 
the  State  collects  no  taxes  on  money  loaned  at 
interest,  or  the  taxes  are  wholly  paid  by  the 
borrower.  If  the  State  collects  no  taxes  of  the 
lender,  then  laws  are  allowed  to  remain  on  the 
statute-book  which  have  practically  no  mean- 
ing. If  they  are  paid  by  the  borrower,  then  the 
State  taxes  heavily  a class  of  persons  whom  it 
is  most  injudicious  to  tax  in  such  manner — the 
men  who  are  doing  most  to  develop  the  re- 
sources of  the  State,  and  increase  its  wealth, 
production,  and  commerce.  In  short,  money 
will  always  command  its  net  value  in  every 
market,  and  the  imposition  of  taxes  merely  in- 
creases the  charge  made  for  its  use.  It  was  so 
in  the  Middle  Ages,  when  the  Jews  were  the 
chief  capitalists,  and  the  thumb-screw  and  the 
rack  instruments  of  assessment.  It  is  so  to- 
day, all  legislation  to  the  contrary  notwith- 
standing. 

Again,  let  us  consider  how  the  proposed  sys- 
tem of  taxation  will  affect  persons  of  small 
means,  who,  by  long-continued  effort  and  sav- 
ing, have  obtained  a homestead,  but,  through 
inability  to  completely  pay  for  the  same,  have 
given  a mortgage  upon  the  premises.  As  the 
case  now  stands,  they  are  liable  to  taxation 
under  the  existing  law  on  its  full  valuation 
of  their  real  estate,  and  also  on  their  furni- 
ture and  other  personal  property.  The  mort- 
gage on  the  property  is  also  subject  to  tax- 
ation, which,  as  before  demonstrated,  is  also, 
either  directly  or  indirectly,  paid  by  the  bor- 
rower or  mortgagor.  And  here  it  is  to  be  re- 
membered that  the  present  system  already 
practically  imposes  the  bulk  of  the  taxes  on 
real  estate,  and  that,  under  the  recent  legal  de- 
cisions, the  amount  of  personal  property  that 
can  be  directly  made  subject  to  taxation  will 
every  year  become  proportionably  less. 

Let  us  suppose  the  property  in  question  to  be 
located  in  Brooklyn,  Troy,  Albany,  or  Roches- 
ter, in  all  of  which  cities  the  present  rate  of 
taxation  is  in  excess  of  four  per  cent.  If  the 
assessment  is  made  on  a full  valuation  of  $4000, 
the  annual  taxation  at  four  per  cent,  would  be 
$160;  and  if  on  a valuation  of  fifty  per  cent, 
(which  valuation  must  soon  be  exceeded,  if  per- 
sonal property  is  to  continue  to  evade  its  liabil- 
ities), eighty  dollars. 

Under  the  proposed  system  of  the  commis- 
sioners, the  rate  can  not  be  in  excess  of  two  per 
cent.,  and  will  probably  be  much  less.  Two 
per  cent,  on  a fifty  per  cent,  valuation  of  the 
land,  supposing  the  value  of  the  property  to 
be  equally  divided  between  the  land  and  the 
building,  would  be  twenty  dollars  ($1000X2 
p.  c.— $20).  Two  per  cent,  on  a full  valuation 
of  the  dwelling  ($2000X2  p.  c.=$40)  would 
be  forty  dollars  ; total,  sixty  dollars  annual  tax- 
ation. Or,  according  to  the  basis  of  the  second 
proposition  of  the  commissioners,  in  which  three 
times  the  rent  or  rental  value  of  the  premises  is 
taken  as  a representation  of  the  personal  prop- 
erty, the  taxation  would  be  as  follows : Two  per 


cent,  on  a fifty  per  cent,  real  estate  valuation  of 
the  whole  property  would  be  $40  ($4000  ~2— 
$2000X2  p.  c.=$40).  Assume  then  the  rent- 
al to  be  equivalent  to  ten  per  cent,  on  the  full 
value  of  the  property,  or  $400  ; three  times  this 
would  be  $1200,  on  which  the  taxation  at  two 
per  cent,  would  be  twenty-four  dollars ; making 
the  total  taxation  sixty-four  dollars,  as  compared 
with  sixty  dollars  according  to  the  basis  of  the 
first  proposition ; and  eighty  dollars  according 
to  a fifty  per  cent,  valuation  under  the  existing 
laws,  plus  the  taxes  on  the  mortgage  encum- 
brance, and  on  all  the  personal  property  of  the 
owner.  And  yet,  while  every  real  estate  owner 
in  the  State  will,  under  the  proposed  system, 
equitably  pay  less  than  now  on  his  real  estate, 
the  valuation  of  the  State,  through  a real  and 
unavoidable  inclusion  of  its  personal  property, 
will  be  very  greatly  increased. 

We  come  next  to  the  consideration  of  the 
question  of  the  manner  in  which  the  valuation 
of  property  and  the  rate  and  apportionment  of 
taxes  will  be  affected  under  the  proposed  sys- 
tem. Under  the  conditions  of  the  first  proposi- 
tion, that  land  and  buildings  should  be  taxed  on 
a valuation  of  fifty  per  cent.,  and  that  an  addi- 
tional fifty  per  centum  should  be  added  on  build- 
ings to  represent  personal  property,  the  result 
would  be  approximately  as  follows : 

It  is  certain  that  the  average  valuation  of  land 
and  buildings,  real  estate,  throughout  the  State, 
is  not  now  in  excess  of  fifty  per  centum  of  their 
fair  marketable  value.  The  probabilities  are, 
furthermore,  that  the  average  is  considerably 
less  than  this  proportion.  Under  the  new  sys- 
tem, therefore,  the  valuation  of  real  estate  would 
be  no  less  than  it  is  at  present  (1869),  viz., 
$1,532,720,907.  To  aid  in  the  formation  of 
an  opinion  as  to  what  would  be  the  valuation 
of  the  personal  property  subject  to  assessment, 
on  the  assumption  that  the  personal  property  of 
the  State  is  justly  represented  by  fifty  per  cent, 
of  the  fair  value  of  its  buildings,  irrespective  of 
their  contents,  or  of  the  land  upon  which  they 
are  situated,  we  have  a variety  of  data. 

If  we  assume  that  half  of  the  present  valua- 
tion of  real  estate  is  represented  by  the  value  of 
the  buildings,  and,  according  to  the  existing  prac- 
tice of  appraising  land  and  buildings,  such  an 
assumption  is  not  probably  far  from  the  truth, 
then  the  personal  property  valuation  on  such  ba- 
sis would  be  $760,360,000.  If  we  add  to  this 
the  valuation  of  the  property  of  corporations, 
taxed  under  the  first  provision  of  the  new  sys- 
tem— which,  in  the  two  items  alone  of  railroads 
($302,692,801)  and  public  banks  ($174,833,- 
786),  aggregate  ($477,556,587)— say  $500,000,- 
000 — we  have  a total  valuation  representing  per- 
sonal property  of  $1,237,896,587,  as  compared 
with  a present  valuation  of  $434,270,278. 

If  we  assume  the  value  of  the  buildings  as 
only  one-third  of  the  present  real  estate  valua- 
tion, then  the  total  valuation  representing  per- 
sonal property  would  be  reduced  to  $1,110,- 
906,969,  as  compared  with  the  present  valua- 
tion of  $434,270,278. 


58 


LOCAL  TAXATION. 


According  to  the  census  of  the  State  of  New 
York  for  1865,  the  value  of  the  dwellings  alone 
returned  was  $977,121,378;  and  in  this  return 
66,114  dwellings  were  omitted  in  valuation,  as 
well  as  all  buildings  not  used  for  the  purpose 
of  dwellings.  It  should,  however,  be  stated  that 
the  value  of  the  dwellings  as  above  returned  in- 
cluded the  value  of  the  lot  of  land  on  which  such 
buildings  are  built,  if  in  a city  or  village,  but 
not  otherwise.  It  is,  however,  altogether  prob- 
able that  the  census  valuation  of  dwellings  as 
above  given  is  much  below  the  true  value  ; and 
that  this  is  the  opinion  of  the  superintendent  of 
the  census  (Dr.  Hough),  is  shown  by  the  follow- 
ing extract  of  a letter  from  that  gentleman  in 
reference  to  this  subject.  He  says  : 

“I  have  observed  that  inquiries  relative  to 
real  estate  by  census  enumerators  are  regarded 
with  great  jealousy  by  the  people  generally,  and 
a law  intended  for  complete  operation,  in  all 
that  can  properly  come  within  the  range  of  a 
census,  should,  in  my  opinion,  leave  out  such 
inquiries  altogether,  or  have  some  provision 
tending  to  relieve  from  suspicion  of  taxation.” 

It  is  interesting,  also,  to  compare  the  results 
of  the  enumeration  of  the  dwellings  in  the  State 
by  the  State  census  of  1865,  and  by  the  United 
States  census  of  1870.  The  first  (State  census) 
returned  the  whole  number  at  544,398  ; the  sec- 
ond (United  States  census)  returns,  in  1870,  out 
of  the  876  subdivisions  of  the  State,  678,952,  a 
difference  or  increase  in  five  years  of  134,554. 
For  the  year  1869,  the  whole  number  of  pro- 
posed new  buildings  reported  by  the  superin- 
tendent of  buildings  in  New  York  city  was  2348, 
of  the  value  of  $39,331,088;  and  for  the  year 
1870,  2189  new  buildings  of  the  value  of  $31,- 
731,348 ; or,  in  other  words,  the  total  value  of 
the  new  buildings  proposed  to  be  erected  in 
New  York  city  during  the  last  two  years  only, 
and  nearly  all  of  which  were  either  commenced 
or  finished,  amounts  to  $71,062,436,  or  to  nearly 
one-tenth  of  the  assumed  fifty  per  cent,  valuation 
of  all  the  buildings  of  the  State  as  above  given. 

Again,  under  the  conditions  of  the  second 
proposition,  that  three  times  the  rent  or  rental 
value  of  the  buildings  of  the  State  shall  be 
taken  as  the  valuation  and  representation  of  the 
personal  property  of  its  citizens,  we  have  the 
following  data  as  a basis  for  estimating  the  total 
valuation  which  may  be  obtained  for  taxation  : 

The  estimate  given  to  the  commissioners  by 
persons  whose  judgment  is  to  be  relied  on,  is  to 
the  effect  that  the  present  annual  rental  of  the 
buildings  of  the  compactly  built  wards  of  New 
York  city  is  considerably  in  excess  of  $100,- 
000,000.  Three  times  this  amount  would  be 
$300,000,000.  If  we  add  to  this  the  capital, 
surplus,  and  undivided  profits  of  the  national 
banks  of  the  city,  $104,000,000,  and  the  valua- 
tion of  gas  companies,  horse  railroads,  femes, 
omnibus  lines,  the  franchise  of  insurance  and 
trust  companies,  private  banking  capital,  and 
the  surplus  of  savings  banks,  $100,000,000  (esti- 
mate), we  have  a valuation  representing  per- 
sonal property  of  $504,000,000,  as  compared 


with  a present  personal  property  valuation  of 
$281,000,000.  . 

But  greaf,  as  would  be  the  gain  in  valuation 
here,  the  gain  in  other  parts  of  the  State  would 
undoubtedly  he  in  much  larger  proportion. 
Thus,  taking  Brooklyn  for  example,  we  find  the 
value  of  the  dwellings  in  that  city,  according  to 
the  census  of  1865,  returned  at  $120,000,000; 
the  annual  rental  of  which,  at  ten  per  cent,  (a 
low  rate  to  cover  insurance,  repairs,  and  taxes), 
would  be  $12,000,000 ; three  times  which  would 
be  $36,000,000.  If  we  add  to  this  the  amount 
on  which  the  corporations  of  the  city  of  Brooklyn 
are  assessed  for  the  present  year,  $7,956,820,  we 
have  the  total  of  $43,956,820,  as  compared  with 
a present  valuation  of  personal  property  for  the 
whole  city  of  $17,559,980,  showing  a gain  of 
$25,396,840.  And  this  result,  it  must  be  re- 
membered, is  predicated  on  the  rentals  of  dwell- 
ings alone,  thus  making  it  evident  that,  where 
the  rentals  of  buildings  other  than  dwellings 
are  also  included,  the  valuation  will  be  still 
further  increased.  That  such  a valuation  of 
personal  property  is  even  then  much  less  than  a 
true  valuation  would  seem  to  be  demonstrated 
by  the  circumstance  that  the  amount  of  income 
in  excess  of  $600,  with  the  rent  or  rental  value 
of  dwellings,  and  the  cost  of  the  annual  repairs 
on  the  same  in  addition,  on  which  an  income 
tax  was  collected  in  the  city  of  Brooklyn  for  the 
year  1868,  was  in  excess  of  $40,000,000. 

It  seems  evident,  therefore,  that  by  the  pro- 
posed system  the  valuation  of  the  property  of 
the  State  of  New  York  can  be  largely  as  well  as 
equitably  increased,  and  made  without  difficulty 
to  approximate  to  its  fair  and  just  basis ; thus 
affording  all  the  revenue  that  may  be  needed  at 
an  average  rate  much  less  than  the  rate  now 
prevailing.  And  although  the  assertion  is  a 
truism,  it  should  nevertheless  be  distinctly 
borne  in  mind  that  an  equable  increase  in  the 
valuation  of  the  property  of  the  State,  especially 
that  known  as  personal,  does  not  increase  the 
taxes ; but,  on  the  contrary,  by  distributing  them 
fairly,  will  both  decrease  the  rate  and  fairly  pro- 
portion the  average. 

The  following  may  be  also  enumerated  as 
other  advantages  of  the  proposed  system : By 
making  the  standard  of  valuation  and  assess- 
ment, except  in  the  case  of  the  associated  capital 
of  certain  corporations  and  the  capital  of  private 
bankers,  that  which  is  certain , visible , and  tangi- 
ble, and  disregarding  that  which  is  invisible , in- 
corporeal, and  intangible,  the  incentive  and  op- 
portunity for  fraud,  evasion,  and  perjury  would 
all,  or  in  a great  degree,  be  removed  ; the  tax- 
gatherer  brought  in  communication  with  the 
smallest  number  of  individuals  ; all  personal  in- 
quisition, exposure  of  property,  and  necessity  for 
oaths  avoided ; production  of  every  kind,  agricul- 
tural, mining,  and  manufacturing,  placed  upon 
the  most  favorable  conditions ; shipping  fos- 
tered; trade  and  commerce  left  untrammelled ; 
while  all  the  numberless  vexatious  and  difficult 
questions,  which  are  sure  in  the  future  to  grow 
out  of  the  conflict  of  laws  and  the  sovereignty 


LOCAL  TAXATION. 


59 


of  States  respecting  the  situs  of  certain  descrip- 
tions of  personal  property,  would  be  transferred 
to  such  other  communities  as  desire  to  enjoy 
them.  The  proposed  plan,  furthermore,  will 
not  permit  the  dishonest  tax-payer  (under  oath) 
to  arbitrarily  assess  other  persons  by  the  under- 
valuation of  his  own  property,  or,  on  the  oth- 
er hand,  compel  the  honest  tax-payer  to  either 
criminate  or  overburden  himself;  or  permit 
assessors  to  assess  in  an  arbitrary  manner  any 
one,  inasmuch  as  all  the  proceedings  must  be 
according  to  a uniform  law  and  on  the  basis  of 
such  testimony  as  is  admissible  in  any  court  of 
law  in  a country  where  property  can  only  be 
taken  by  well-known  and  established  rules  of 
evidence. 

The  commissioners  would  also  call  attention 
to  the  circumstance,  that  by  their  proposed 
system,  and  by  that  only,  can  the  privilege  of 
exemption  from  taxation  now  enjoyed  by  the 
owners  of  United  States  bonds,  through  the  ex- 
ercise of  federal  authority,  be  practically  done 
away  with,  viz.,  by  placing  such  securities  upon 
the  same  basis  as  all  other  property  of  like 
character,  and  stripping  their  owners  of  any  ex- 
clusive privileges.  Capital,  then,  finding  that 
an  investment  in  United  States  bonds,  or  in  a 
savings  bank  exempt  from  taxation,  offers  no 
advantage  over  an  investment  in  a State  loan 
or  real  estate  mortgage,  will  return  to  the  lat- 
ter, and  thus  increase  the  resources  by  winch 
the  development  of  the  State  is  effected. 

Again,  under  such  a simple  and  liberal, 
though  at  the  same  time  just  and  inflexible  sys- 
tem of  taxation  as  the  commissioners  propose, 
New  York,  instead  of  comparatively  retrograd- 
ing, as  she  has  done  within  the  last  ten  years, 
would  be  more  than  ever  the  Empire  State  of 
the  Union ; and  it  is  the  opinion  of  experts, 
with  whom  the  commissioners  have  consulted, 
that  capital  and  population  would  be  attracted 
to  such  an  extent  from  the  neighboring  States, 
that  the  latter  would  be  forced,  in  self-protec- 
tion, to  place  themselves,  in  respect  to  taxation, 
at  once  upon  a similar  basis. 

Freedom  from  multitudinous  taxes,  espionage, 
and  vexations;  freedom  from  needless  official 
inquisition  and  intrusions ; freedom  from  the 
hourly  provocation  of  each  individual  in  the 
State  to  concealment  and  falsehoods ; freedom 
of  industry,  circulation,  competition  every- 
where : give  the  State  these  conditions,  and  it 
will  give  in  return  a flowing  revenue.  Adopt 
an  oppposite  system,  and  there  will  be  disap- 
pointing revenues,  discontent,  embarrassment, 
and  demoralization  everywhere ; cheerfulness 
and  prosperity  nowhere. 

Another  advantage  which  may  be  claimed  for 
the  proposed  system  of  valuing  the  personal 
property  of  an  individual  for  the  purposes  of 
taxation  according  to  the  indices  which  he  ex- 
hibits to  the  public  is,  that  the  individual 
would  thereby  see  and  feel  in  a consolidated 
form  the  proportion  of  the  public  burden  he  is 
called  upon  to  sustain,  and  accordingly  have 
his  attention  more  powerfully  directed  to  the 


manner  in  which  the  revenues  raised  by  taxa- 
tion are  disposed  of.  On  the  other  hand,  where 
taxes  are  collected  by  indirection,  and  are  lev- 
ied upon  a multitude  of  objects,  they  escape 
the  attention,  and  leave  the  citizen  in  indolent 
and  injurious  indifference  as  to  the  disposition 
that  is  made  of  them.  A striking  illustration 
of  the  truth  of  this  proposition  is  now  afford- 
ed in  the  case  of  the  city  of  Philadelphia,  one 
of  the  cleanest,  most  convenient  and  prosper- 
ous cities  of  the  country.  Taxation  for  munic- 
ipal and  county  expenditures,  as  has  been  be- 
fore shown,  are  here  assessed  almost  exclusive- 
ly upon  land  and  buildings,  and  yet  in  no  other 
city  in  the  country  are  rents  so  moderate,  the 
buildings  so  tasteful,  and  the  investment  in  real 
estate  mortgages  regarded  with  more  favor. 
While  New  York  city,  with  a population  of 
927,000,  in  the  years  1869  and  1870  built  or 
proposed  to  build  4537  buildings ; Philadelphia, 
with  a population  of  657,000,  issued  permits  for 
erection  within  its  limits,  during  the  same  pe- 
riod, of  over  10,000  buildings,  a large  proportion 
of  which  were  for  dwellings.  Notwithstanding 
this  favorable  exhibit  for  Philadelphia,  a portion 
of  her  local  government  are  agitating  the  ques- 
tion of  abandoning  the  existing  system  of  taxa- 
tion, and  of  adopting  a system  akin  to  that  now 
existing  in  New  York  and  Massachusetts.  And 
for  what?  Not  that  the  city  is  not  well  gov- 
erned, and  in  most  respects  what  it  should  be, 
but  simply  that  more  money  may  be  obtained 
for  greater  expenditures.  The  local  legislators 
know  very  well  that  so  long  as  the  present  sys- 
tem of  taxation  is  maintained,  the  raising  of 
additional  revenues  will  be  resisted  and  render- 
ed impracticable;  but  it  is  hoped  that  by 
bringing  into  the  range  of  assessment  the  mul- 
titudinous objects  classed  under  the  head  of 
personal  property,  that  what  is  now  difficult 
will  be  made  easy.  The  commissioners  are  de- 
cidedly of  the  opinion  that  the  citizens  of  Phila- 
delphia, if  they  consult  their  own  interests,  will 
avoid  taking  a step  so  difficult,  when  once  taken, 
to  be  retraced,  and  which  is  sure  to  deprive  them 
of  one  great  element  of  their  present  municipal 
prosperity. 

UNIFORM  REGULATION  OF  THE  RATE  OF  TAXA- 
TION. 

A peculiar  feature,  which  has  for  some  time 
characterized  the  tax  system  of  France,  seems 
to  the  commissioners  worthy  of  being  incorpo- 
rated also  in  any  new  system  which  may  be 
adopted  for  New  York,  viz.,  that  of  limiting, 
by  legislative  authority,  the  rate  according  to 
which  taxes  may  be  levied  in  any  one  year. 
The  revised  statutes  of  France  provide  that  the 
Corps  Legislatif  shall  annually  establish  the 
maximum  rate  of  taxation,  above  which  no  real 
estate  shall  be  taxed.  Then  the  Corps  Legis- 
latif annually  apportions  the  amount  to  be  raised 
by  the  several  departments,  and  limits  the  rate 
of  taxation  which  the  conseils  generaux  (boards 
of  supervisors)  may  levy  in  apportioning  the  rate 
for  the  expenses  of  the  cantons  (counties)  and 


60 


LOCAL  TAXATION. 


also  for  the  municipalities.  The  Corps  Legisla- 
te also,  in  annually  levying  the  direct  taxes, 
gives  authority  for  the  levy  of  a special  tax  at  a 
small  rate,  the  proceeds  of  which  are  to  be  used 
exclusively  in  paying  pressing  claims  on  the 
departments,  cantons,  or  municipalities,  in  case 
other  resources  are  not  sufficient  to  meet  and 
discharge  such  immediate  liabilities.  A perma- 
nent law  then  defines  what  shall  be  considered 
as  “pressing  liabilities,”  viz.,  the  maintenance 
of  the  buildings  of  the  “prefecture,”  the  salaries 
of  the  judiciary,  the  interest  of  debts  lawfully 
contracted,  and  the  judgments  of  the  courts. 

A provision  of  this  character,  adapted  to  the 
circumstances  of  the  State  of  New  York,  and 
embodied  in  the  form  of  law,  will  be  found  in 
sections  14  and  15  of  Outline  Code  No.  2,  given 
in  the  Appendix  to  this  report,  marked  C.  It  is 
also  to  be  noted  that  the  statutes  of  Pennsylva- 
nia already  recognize  this  feature  of  limiting  the 
taxing  power  to  some  extent ; the  language  of 
the  act  defining  the  power  of  county  commis- 
sioners reading  as  follows : “And  no  tax  in  any 
one  year  shall  exceed  the  rate  of  one  per  cent.” 
— Purden’s  Digest  Laws  of  Pennsylvania,  p. 
930,  sec.  13. 

DISPROPORTIONATE  TAXATION. 

At  present,  if  an  individual  is  assessed  on  a 
valuation  in  excess  of  the  true  value  of  his  prop- 
erty, he  can  obtain  relief  by  personally  appear- 
ing before  the  board  of  assessors  and,  as  it  is 
termed,  “swearing  down”  his  valuation.  But 
if  he  is  assessed,  through  error  or  partiality  of  the 
assessors,  on  a valuation  disproportionate  to  his 
neighbors  and  yet  not  in  excess  of  the  true  value 
of  his  property,  there  is  no  mode  of  obtaining 
relief  now  open  to  him  under  the  existing  system. 
To  remedy  this  defect,  and  insure  equality,  the 
commissioners  have  proposed  a plan  believed  to 
be  entirely  new  in  American  tax  systems,  and 
which  in  substance  is  as  follows : The  individual 
aggrieved  may  appear  before  the  assessors  or  tax 
commissioners  sitting  as  a board  of  review ; and 
if  he  can  show  by  the  testimony  of  creditable  wit- 
nesses that  he  has  been  disproportionately  as- 
sessed by  the  undervaluation  of  the  property  of 
his  neighbors,  the  assessors  or  tax  commission- 
ers shall  immediately  raise  the  valuation  of  all 
such  property  undervalued  to  a full  and  fair  valu- 
ation, and  thus  give  relief  to  the  aggrieved  party 
by  a full,  fair,  and  just  valuation.  In  order  to 
the  more  full  understanding  of  the  nature  and 
application  of  such  a provision,  reference  is  made 
to  section  13  of  Outline  Code  No.  2,  given  in 
the  Appendix  to  this  report,  marked  C. 

The  commssioners  do  not,  as  might  have  been, 
perhaps,  anticipated,  present  in  connection  with 
this  report  any  complete  code  of  law  relative  to 
local  taxation,  and  for  the  seeming  omission 
they  submit  the  following  reasons : 

When  a physician  is  called  upon  to  treat  a 
patient,  his  first  business,  if  he  understands  his 
business,  is  to  acquaint  himself  thoroughly  with 
the  nature  of  the  disease,  and  the  habits,  con- 
stitution, and  predispositions  of  the  individual. 


If  prescription  of  remedies  is  attempted  without 
such  an  investigation,  the  treatment  is  simply 
empiricism.  Now,  disease  in  the  body  politic, 
if  treated  intelligently,  must  be  treated  in  a man- 
ner similar  to  disease  in  the  body  organic.  The 
course  of  treatment,  moreover,  involves  three 
points:  1st,  to  ascertain  the  facts;  2d,  to  dis- 
cuss the  remedies ; 3d,  to  apply  the  remedies. 
The  commissioners  claim  that  they  have  em- 
braced the  first  two  of  these  points  in  this  report. 
Sufficient  time  has  not  been  afforded  to  do  more. 
To  draft  a code  of  laws,  to  model  the  machinery 
which  shall  smoothly  and  effectually  raise  by 
taxation  an  annual  revenue,  now  exceeding  ffty 
millions  per  annum,  is  a work  not  to  be  done 
hastily. 

But  if  sufficient  time  had  been  afforded,  the 
commissioners  do  not  think  that  the  presenta- 
tion of  the  draft  of  a code  of  laws  would  be  ex- 
pedient, until  they  have  received  from  the  Leg- 
islature and  the  people  of  the  State  an  expres- 
sion of  opinion  as  to  what  measures,  in  view  of 
the  facts  presented,  will  be  desirable  and  prove 
satisfactory. 

Three  courses  of  procedure  seem  open : 1st, 
to  make  a system  of  laws  on  the  basis  recom- 
mended by  the  commissioners  ; 2d,  to  endeavor 
to  improve,  strengthen,  and  patch  up  the  exist- 
ing system  by  various  amendments ; 3d,  to  make 
a system  of  laws  on  the  basis  of  endeavoring  to 
assess  all  property,  real  and  personal,  things  visi- 
ble and  invisible.  For  whichever  of  these  plans 
the  Legislature  and  the  people  will  indicate  a 
preference,  the  same  the  commissioners  are  now 
ready  to  put  in  the  form  of  law  to  the  best  of 
their  ability  ; but  to  present  the  draft  of  a code 
of  laws  relative  to  taxation  which  is  not  in  ac- 
cordance with  the  wishes  of  the  Legislature  or 
general  public  sentiment,  would  be  a waste  of 
time,  labor,  and  expenditure. 

With  a view,  however,  of  showing  how  the 
provisions  of  the  system  recommended  by  the 
commissioners  can  be  expressed  in  the  form  of 
law,  two  outline  codes  are  given  in  the  Appendix 
to  this  Report,  marked  C ; Outline  Code  No.  1 
being  drawn  on  the  assumption  that  fifty  per 
cent,  of  the  value  of  the  building  is  to  be  taken 
as  the  representative  basis  of  personal  property  ; 
and  Outline  Code  No.  2,  on  the  assumption  that 
three  times  the  rent , or  rental  value , best  con- 
stitutes such  a representative  basis. 

If  the  third  plan,  i.  e.,  that  of  taxing  all  prop- 
erty at  one  uniform  rate  is  preferred,  the  code 
adapted  to  the  same  is  ready  at  hand,  in  the 
draft  of  laws  prepared  by  the  commissioners  of 
New  Jersey  and  Connecticut  in  1869,  and  reject- 
ed by  their  respective  Legislatures ; or  a more  re- 
cent draft,  in  which  the  universal  and  uniform 
principle  is  carried  out  to  the  fullest  extent — 
namely,  that  prepared  during  the  past  year  by 
the  Board  for  the  Equalization  of  Taxes  in  the 
State  of  Illinois,  under  the  direction  of  the  Legis- 
lature of  that  State.  Some  idea  of  the  charac- 
ter of  this  act — the  most  complete  for  its  pur- 
pose, as  above  stated,  undoubtedly  ever  drafted 
— may  be  obtained  from  the  statement  that  the 


LOCAL  TAXATION. 


Cl 


act  forms  a pamphlet  of  forty  closely-printed 
pages,  embracing  255  sections ; and  under  the 
head  of  personal  property  requires  thirty-seven 
specific  returns  to  be  made  by  each  individual 
tax-payer ; each  female,  among  other  provisions, 
being  required  to  submit  annually  a list  (and 
make  oath  to  the  same)  of  all  her  jewelry  and 
other  personal  ornaments  of  value.  As  some 
indication,  moreover,  of  its  popularity  and  ac- 
ceptance by  the  people,  the  commissioners  quote 
the  following  exhibit  of  the  act  as  set  forth  in 
one  of  the  leading  papers  of  the  State,  acting  in 
harmony  with  the  dominant  political  party  in 
the  Legislature : 

“ The  Board  for  the  Equalization  of  State 
Taxes  has  prepared  and  submitted  to  the  Legis- 
lature a draft  of  a law  ivhich  makes  a book  of 
forty  pages,  closely  printed  in  small  type.  The 
bill  is  ‘ for  the  assessment  of  property,  and  for 
the  levy  and  collection  of  taxes.’  It  far  ex- 
ceeds, in  rapacity,  any  of  the  internal  revenue 
laws  passed  during  the  war.  Without  excep- 
tion, it  is  the  most  objectionable  law  that  was 
ever  proposed,  and  we  can  imagine  no  act  which 
will  become  so  justly  odious  and  detestable. 
The  machinery  is  of  the  most  complicated  and 
multiform  sort.  It  violates  the  sanctity  of 
men’s  domestic  and  business  affairs,  exposes  ev- 
ery person’s  financial  transactions,  requires  of 
each  person  a large  amount  of  book-keeping 
and  ready  swearing,  and  will  make  the  num- 
ber of  officials,  and,  of  course,  the  compensation 
of  persons  collecting  the  revenue,  twice  the  un- 
necessary and  extravagant  number  now  paid. 
The  bill  provides  for  the  establishment  of  a dis- 
tinct branch  of  the  Government,  which  may 
properly  be  styled  the  grand  inquisitorial  and 
confiscating  office ; and  this  department  is  to  be 
clothed  with  powers  and  functions  which,  if  en- 
forced, would  produce  a revolution  in  Austria 
or  Turkey.  We  hope  the  Legislature  will  lay 
this  ponderous  bill,  with  its  inquisitions,  double 
and  treble  taxations,  exactious  oaths,  confisca- 
tions, fines,  penalties,  and  forfeitures,  on  the  ta- 
ble, leaving  the  present  revenue  laws  in  force 
until  the  public  debt  of  the  State  is  discharged.” 
— Chicago  Tribune,  Jan.,  1871. 

The  commission  would  therefore  respectful- 
ly ask  the  Legislature,  through  his  Excellency, 
the  Governor  of  the  State,  for  instructions  as 
to  the  system  they  shall  recognize  in  the  prep- 
aration of  a code  of  laws  ; and  a further  limit- 
ed time  for  the  completion  of  the  work.  They 
would  ask  the  people  of  the  State  to  give  to  the 
facts  and  arguments  presented  in  this  report  a 


fair  and  candid  consideration,  and  not  allow 
themselves  to  be  prejudiced  by  any  accusations 
that  may  be  made  to  the  effect  that  the  com- 
missioners in  opposing  the  direct  taxation  of 
personal  property  in  the  possession  of  individuals 
are  acting  in  behalf  of  the  moneyed  and  against 
the  landed  interest  of  the  State ; and  generally 
to  so  express  their  opinion  that  the  commission- 
ers may  be  able  to  judge,  before  completing 
their  work,  what  final  results  are  likely  to  com- 
mand a general  approval. 

In  regard  to  the  obtaining  of  a more  efficient 
administration  of  the  revenue  laws,  without 
which  no  system  of  taxation  can  be  made  satis- 
factory, the  views  of  the  commissioners  have 
been  heretofore  given. 

Reference  is  also  made  to  the  Appendices  of 
this  report  for  a more  full  presentation  of  the 
following  topics  : Appendix  A,  Local  taxation 
in  Canada;  Appendix  B,  A detailed  analysis  and 
review  of  the  legal  questions  and  court  decisions 
involved  in  the  determination  of  the  situs  of  per- 
sonal property,  and  the  jurisdiction  of  States  in 
respect  to  the  same  ; Appendix  C,  Outline  codes 
of  law , in  accordance  with  the  provisions  of  the 
new  system  of  taxation  recommended  by  the  com- 
missioners. 

For  the  length  of  their  report  the  commission- 
ers offer  no  apology.  The  subject  committed  to 
them  for  investigation  is  one  of  almost  infinite 
detail,  and  intimately  concerns  every  material 
interest  of  the  State,  present  and  prospective. 
To  discuss  it  other  than  comprehensively  was  to 
discuss  it  imperfectly ; to  attempt  to  draft  a code 
of  law  without  full  inquiry  into  the  conditions 
which  are  to  serve  as  its  basis  was  to  follow  an- 
cient precedent.  The  commissioners  do  not 
claim  to  have  exhausted  the  subject,  for  they  are 
conscious  of  having  omitted  many  things  which, 
if  opportunity  is  offered,  they  propose  to  present 
hereafter ; but  they  are  confident  that  they  have 
made  the  best  use  of  the  time  which  has  been 
placed  at  their  disposal,  and  have  been  influ- 
enced by  no  other  motives  than  an  earnest  desire 
to  subserve  the  interest  and  promote  the  devel- 
opment of  the  State. 

Respectfully  submitted. 

David  A.  Wells, 
Edwin  Dodge,  >> 
George  W.  Cutler. 

To  His  Excellency, 

John  T.  Hoffman, 

Governor  of  the  State  of  New  York. 

Albany,  February , 1871. 


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APPENDIX. 


A. 

LOCAL  TAXATION  IN  LOWER 
CANADA. 

In  Montreal,  which,  in  respect  to  municipal 
administration,  may  be  taken  as  a type  of  the 
provincial  towns  and  cities,  there  is  no  tax  what- 
ever upon  bank  capital  or  money  at  interest,  and 
comparatively  none  upon  other  personal  prop- 
erty ; but  the  revenue  necessary  to  defray  munic- 
ipal expenditures  is  derived  from  the  following 
sources : 1.  An  assessment  of  Is.  6d.  in  the  pound 
on  the  assessed  yearly  value  of  all  real  prop- 
erty ; this  levy  to  be  made,  in  the  first  instance, 
upon  the  owners,  but,  on  default  of  payment, 
then  upon  the  occupiers,  who  are  authorized  to 
deduct  the  amount  of  the  assessed  tax  from  the 
rents  to  be  paid  for  the  property.  2.  An  extra 
assessment  of  one-half  cent  per  every  four  dol- 
lars of  the  assessed  value  of  all  real  property,  to 
be  paid  by  the  owners,  in  addition  to  the  assess- 
ment before  mentioned.  3.  An  annual  tax  upon 
all  merchants  and  dealers,  at  the  rate  of  thirty 
(dollars  for  every  four  hundred  dollars  of  the  as- 
sessed yearly  value  of  the  premises  occupied  or 
used  hy  them.  4.  An  annual  duty,  in  addition, 
upon  keepers  of  taverns  or  places  of  entertain- 
ment, varying  from  twenty-seven  dollars  when 
the  assessed  yearly  value  of  the  premises  used 
shall  not  exceed  one  hundred  and  sixty  dollars, 
to  one  hundred  and  seventy-five  dollars  when 
the  yearly  value  of  the  premises  used  exceeds 
two  hundred  dollars,  and  is  less  than  two  thou- 
sand four  hundred  dollars  ; and,  when  in  excess 
of  the  last-mentioned  sum,  an  additional  rate  of 
seventeen  dollars  and  fifty  cents  for  every  four 
hundred  dollars  over  two  thousand  four  hundred 
dollars.  5.  An  annual  duty,  vaiying  from  one 
hundred  and  sixty  dollars  to  two  hundred  dollars, 
on  auctioneers,  exclusive  of  any  other  rate  or  duty 
to  which  said  persons  may  be  otherwise  liable. 
6.  An  annual  duty  of  eight  hundred  dollars  upon 
every  gas  company  or  gas  factory.  7.  An  annual 
duty  of  eighty  dollars  upon  livery-stable  keepers ; 
and  an  additional  annual  duty  of  three  dollars 
upon  every  two-wheeled  vehicle,  and  of  four  dol- 
lars upon  every  four-wheeled  vehicle  kept  for 
hire.  In  the  case  of  vehicles  kept  for  hire  by 
keepers  of  houses  of  public  entertainment,  the 
above  rates  are  increased,  respectively,  to  six 
dollars  and  eight  dollars.  8.  An  annual  duty 
of  two  hundred  dollars  on  pawnbrokers.  9.  An 
annual  duty  of  two  dollars  and  fifty  cents  on 
each  working-horse  or  mare ; and  of  six  dollars 
on  every  pleasure-horse  or  mare  kept  or  owned 


in  the  city.  10.  An  annual  duty  of  from  three 
dollars  to  four  dollars  on  vehicles  kept  for  hire 
by  persons  other  than  those  above  mentioned, 
and  an  annual  duty  of  from  eight  to  twelve 
dollars  on  stage-coaches  and  omnibuses.  11. 
An  annual  duty  of  from  six  dollars  to  twenty 
dollars  on  vehicles  kept  for  pleasure.  12.  An 
annual  duty  of  one  dollar  and  fifty  cents  on  each 
dog,  to  be  paid  by  the  owner  or  keeper.  13. 
An  annual  duty,  varying  from  eight  dollars  to 
twenty  dollars,  on  peddlers  and  hawkers.  14. 
An  annual  duty  of  one  hundred  and  fifty  dollars 
on  the  proprietor  of  each  and  every  theatre,  in 
addition  to  the  assessment  on  the  yearly  rental 
of  the  building.  15.  A tax  of  one  hundred  dol- 
lars on  every  transient  amusement  or  exhibition ; 
and  a further  tax  of  twelve  dollars  for  each  and 
every  day  or  night  such  exhibition  or  amusement 
shall  be  open  to  the  public.  16.  An  annual  tax 
of  two  hundred  dollars  on  ferry-boats.  17.  An 
annual  tax  of  four  hundred  dollars  on  every  per- 
son or  firm  engaged  in  the  business  of  banking ; 
of  one  hundred  and  fifty  dollars  on  brokers  or 
money-changers;  eighty  dollars  on  commission 
merchants  and  money-lenders,  and  two  hundred 
dollars  on  insurance-agents.  18.  An  annual  tax 
on  telegraph  companies  of  four  hundred  dollars. 
19.  An  annual  tax  on  distilleries  at  the  rate  of 
eighty  dollars  for  every  four  hundred  of  the  as- 
sessed yearly  value  of  the  premises  occupied ; 
and,  on  brewers,  a similar  tax  at  the  rate  of  six- 
ty dollars.  20.  An  annual  tax  of  one  hundred 
dollars  upon  every  billiard-table,  bagatelle-board, 
or  any  other  gambling-board  kept  at  any  place  or 
house  of  public  resort,  and  a similar  annual  duty 
on  every  bowling-alley.  21.  An  annual  duty  of 
forty  dollars  on  every  brick-yard.  22.  An  an- 
nual duty  of  ten  dollars  on  every  horse-dealer. 
In  addition  to  the  above  rates,  the  use  of  water 
supplied  by  the  city  is  charged  for  specifically. 

Taxation  in  the  Province  of  Quebec. — The 
system  of  taxation  provided  in  the  municipal 
code  of  the  province  of  Quebec  (1870)  defines 
taxable  property  as  follows  : 

1st.  All  lands  and  real  estate,  except  property 
belonging  to  the  Government,  and  to  religious, 
charitable,  and  educational  institutions,  provided 
that  the  same  is  not  held  by  such  institutions  for 
the  purpose  of  deriving  a revenue  therefrom. 

2d.  The  yearly  salary  of  all  civil  officers  of  the 
Government,  federal  or  provincial. 

3d.  The  annual  income  of  professional  men, 
merchants,  bankers,  teachers,  etc. 

4th.  The  annual  salary  of  all  other  persons  en- 
gaged in  another’s  service,  and  whose  salary  ex- 
ceeds $400. 


64 


LOCAL  TAXATION. 


If  a rate-payer  who  possesses  property  de- 
clared to  be  taxable  has  his  domicile  in  one  lo- 
cal municipality  and  his  place  of  business,  from 
which  is  derived  such  taxable  property,  in  anoth- 
er, such  property  is  only  taxable  in  the  local  munic- 
ipality in  which  is  situated  his  place  of  business. 

The  council  of  every  local  municipality  may, 
by  resolution,  exempt  from  the  payment  of  munic- 
ipal taxes,  for  a period  not  exceeding  five  years, 
any  person  who  carries  on  any  business,  trade, 
mining  or  manufacturing  enterprise  whatsoever, 
as  well  as  the  land  used  for  such  business,  etc. ; or 
agree  with  such  person  for  a fixed  sum  of  money, 
payable  annually,  for  any  period  not  exceeding  ten 
years,  as  commutation  of  all  municipal  taxes. 


B. 

SITUS  OF  PERSONAL  PROPERTY,  AND 

THE  JURISDICTION  OF  SOVEREIGN- 
TIES IN  RESPECT  TO  SUCH  PROPER- 
TY, UNDER  VARYING  CIRCUMSTAN- 
CES. 

The  ordinary  rule  or  fiction  of  law  ( Mobilia 
personam  sequuntur ) is,  that  all  personal  property 
follows  the  person  of  the  owner,  and  accordingly, 
for  purposes  of  taxation,  personal  property  has 
been  generally  held  to  have  no  situs  away  from 
the  person  or  residence  of  the  owner,  but  is  deem- 
ed to  be  present  with  him,  at  the  place  of  his 
domicile.  In  the  State  of  New  York,  this  was 
both  the  law  and  the  practice  until  1861-2,  when 
the  Court  of  Appeals,  in  the  case  of  Hoyt  vs.  The 
Commissioners  of  Taxes  of  the  City  of  New  York 
(23  N.  Y.,  224),  decided,  that  although  the  law 
provides  “that  every  person  shall  be  assessed  in 
the  town  or  ward  where  he  resides  for  all  person- 
al estate  owned  by  him,”  a resident  of  New  York 
can  not  be  taxed  for  personal  property  actually 
situated  out  of  the  State.  Since  then,  all  person- 
al property  of  a visible  nature  or  of  the  nature  of 
chattels,  which  can  clearly  be  held  to  have  a situs , 
belonging  to  a resident  of  New  York  and  actual- 
ly situated  without  the  State,  has  been  exempted 
from  taxation,  especially  when  a specific  demand 
has  been  made  for  such  exemption ; but  personal 
property  of  the  nature  of  negotiable  instruments, 
stocks  and  choses  in  action , are  generally  held  by 
the  assessors  to  be  taxable  to  residents  of  New 
York,  irrespective  of  what  may  be  their  actual 
situs.  In  Massachusetts  the  precept  of  the  as- 
sessors of  the  city  of  Boston,  for  example,  for  the 
year  1870,  served  on  tax-payers  in  connection 
with  a blank  for  the  specific  return  of  personal 
property,  requires  that  there  shall  be  returned  in 
the  schedule  for  valuation  and  taxation — 1.  “All 
goods,  wares,  and  merchandise,  or  any  other  stock, 
in  trade,  either  within  or  without  the  common- 
wealth 2.  “Vessels,  or  parts  of  vessels  at  home 
or  abroad  3.  “ Shares  in  all  incorporated  com- 
panies except  national  banks,  wherever  located, 
chartered  by  or  organized  under  the  laws  of  any 
State  or  nation  other  than  the  commonwealth  of 
Massachusetts.” 

The  practice  of  the  assessment  of  personal 
property  is  also  substantially  the  same  in  Rhode 
Island  and  Connecticut,  except  that  the  latter 
State  provides  that  ‘ ‘ it  shall  not  be  necessary  to 
include  in  the  list  of  any  person  liable  to  be  assess- 


ed any  property  situated  out  of  the  State  when 
it  can  be  made  satisfactorily  to  appear  to  the  as- 
sessors that  the  same  is  fully  assessed  and  taxed 
in  such  State  to  the  same  extent  as  other  like 
property  owned  by  citizens  of  such  State.”  In 
Rhode  Island  and  Massachusetts  no  such  liberal- 
ity of  assessment  is  reported,  although  the  lack 
of  it  obviously  tends  to  and  actually  does  result 
in  double  taxation ; and  in  a case  recently  tried 
before  the  Supreme  Court  of  Connecticut,  Sprague 
vs.  The  Town  of  Lisbon , the  plaintiff,  a citizen 
of  Rhode  Island,  sought  to  recover  taxes  assessed 
on  personal  property  in  the  form  of  machinery  in 
a cotton-mill  located  and  working  in  Connecticut, 
on  the  ground  that  the  same  was  taxed  as  person- 
al property  to  the  owner  in  the  State  of  Rhode 
Island. 

We  now  propose  to  exhibit  how  far  the  decis- 
ions of  the  highest  courts  concur  or  conflict  with 
the  above  referred  to  opinions  and  practices. 

The  question  at  issue,  viz.,  the  situs  of  person- 
al property,  in  fact,  ranks  among  the  very  oldest 
questions  at  law  of  which  there  is  any  authentic 
record ; dating  back  even  to  a trial  in  the  time 
of  the  Amphyctionic  Council,  b.c.  400.  The 
matter  in  controversy  in  this  early  case,  and  oth- 
ers similar  of  subsequent  date,  although  belong- 
ing to  the  domain  of  international  rather  than 
revenue  law,  nevertheless  involve  points  of  a 
character  which  are  to-day  fundamental  to  the 
latter,  viz.,  as  to  the  extent  of  the  power  of  a con- 
queror and  of  the  sovereign  de  facto  (or,  what  is 
the  same  thing,  of  the  State  itself),  over  incor- 
poreal things ; which  last  may  be  defined  to  be 
“rights,”  which  exist  in  mental  apprehension  as 
connected  with  a given  subject  to  which  they  are 
attached,  and  with  a material  object  upon  which 
they  can  be  exercised ; and  not  external  things, 
chattels,  which  by  seizure  can  be  made  the  subject 
of  actual  possession.  The  weight  of  the  authori- 
ties on  international  law  is,  first,  that  such  incor- 
poreal things  as  debts  (bonds,  mortgages,  money 
at  interest,  choses  in  action ) do  not  accrue  to  a 
conqueror  or  sovereign  prince  as  a consequence 
of  the  possession  of  the  person  who  is  entitled  to 
them ; the  legitimate  inference  from  which  is, 
first , that  personal  property,  of  an  incorporeal  or 
non-visible  character,  can  not  be  held  to  follow 
the  person ; second,  that  incorporeal  rights  do  not 
accrue  to  a conqueror,  a sovereign,  or  a State, 
from  the  circumstance  even  of  possession  of  the 
instruments  or  documents  which  contain  the  legal 
statement  of  the  obligation  of  the  obligor,  which 
are,  so  to  speak,  the  title-deeds  of  the  obligee,  be- 
cause they  are  not  the  debt  itself,  but  one  means,  and 
not  the  only  means,  under  all  circumstances,  of 
proving  that  it  exists ;*  a conclusion  which  has 
been  substantially  affirmed  by  the  Supreme  Court 
of  Pennsylvania,  in  a recent  decision,  to  the  effect 
that  a railroad  mortgage-bond  was  not  in  itself 
property,  but  simply  evidence  of  the  existence  of 
property  in  the  State  where  the  bond  was  created, 
and  that  the  situs  of  the  property  was  therefore 
necessarily  independent  of  the  situs  of  the  bond. 
And  this  position,  it  may  be  observed,  finds  fur- 
ther confirmation  in  the  circumstance  that  a credi- 
tor may  recover  a debt,  even  though  the  instru- 
ments which  constitute  the  main  evidence  of  the 
title  to  the  obligation  may  be  destroyed. 

The  case  involving  the  situs  of  personal  prop- 


* Pkillimore  on  International  Law. 


APPENDIX. 


erty,  before  referred  to,  as  having  been  tried  be- 
fore the  Amphyctionic  Council  of  Greece,  arose 
in  this  wise : After  the  conquest  of  Thebes,  Alex- 
ander the  Great  found  documents  in  which  the 
Thessalians  acknowledged  themselves  to  have 
borrowed  a hundred  talents  from  the  Thebans. 
The  Thessalians  had  been  allies  of  Alexander ; 
and  in  return  for  their  aid,  he  gave  them  the  docu- 
ments which  contained  an  acknowledgment  of  the 
debt.  The  Thebans,  nevertheless,  subsequently 
reinstated  in  the  possession  of  their  state  by  Cas- 
sander,  demanded  payment  of  their  debt  from  the 
Thessalians.  It  was  admitted  on  all  hands  that 
the  hundred  talents  had  been  borrowed  and  not 
repaid ; and  the  question  of  law  depended  on  the 
validity  of  the  gift  by  Alexander.  The  cause  was 
heard  before  the  great  international  tribunal  of 
Greece,  the  Amphyctionic  Council,  and  the  de- 
cision, although  not  specifically  handed  down,  is 
inferred  to  have  been  in  favor  of  the  Thessalians. 
But  if  such  was  the  decision,  it  must  not  be  there- 
fore concluded,  says  Mr.  Phillimore,  that  it  con- 
travenes the  acknowledged  principles  of  interna- 
tional law  respecting  the  transfer  of  incorporeal 
property,  for  the  majority  of  jurists,  supporting 
the  decision  of  the  Amphyctions,  agree  that  Alex- 
ander had  become  so  entire  and  absolute  a mas- 
ter of  Thebes— the  heir,  as  it  were,  and  the  uni- 
versal successor  to  a defunct  and  extinguished 
State — that  he  was  possessed  of  every  thing  and 
right  appertaining  to  that  city. 

Another  case  of  similar  character  to  that  of  the 
Thebans  vs.  Thessalians , but  of  modern  date,  grew 
out  of  the  formal  appropriation  by  Napoleon  I., 
in  1808,  of  the  debts,  notes,  mortgages,  etc.,  of 
the  Elector  of  Hesse  Cassel,  when  the  former  be- 
came sovereign  by  conquest  and  treaty  of  the  Elec- 
torate ; which  debts,  in  all  or  part,  were  subse- 
quently released  or  cancelled  by  Napoleon  I.  for  a 
consideration.  On  the  overthrow  of  Napoleon  in 
1814,  when  the  Elector  was  restored  to  his  sover- 
eignty and  estates,  he  denied  the  validity  of  the 
alienation  of  the  debts  in  question,  and  instituted 
proceedings  to  compel  a second  or  re-payment  to 
himself  personally.  The  case,  referred  to  the  ap- 
propriate tribunals  of  Germany,  remained  a mat- 
ter of  dispute  for  many  years,  and  has  since  taken 
its  place  among  the  causes  celebres  of  public  or 
international  law.  The  decisions,  so  far  as  any 
were  arrived  at,  were  to  this  effect : That  the  elect- 
or could  not  be  held  to  have  constructive  posses- 
sion of  the  debts  (the  circumstances  being  con- 
sidered under  which  the  money  was  borrowed), 
because  he  had  retained  possession  of  the  instru- 
ment containing  the  written  acknowledgments  of 
the  debtors ; but  that  their  situs  and  possession 
was,  on  the  contrary,  with  the  person  who  had 
become  the  de  facto  sovereign  of  the  States  of  the 
elector,  acknowledged  as  such  by  the  subjects  over 
whom  he  ruled,  and  recognized  also  by  foreign 
States. 

Coming  down  to  more  recent  times,  the  decis- 
ions of  interest  and  importance  in  respect  to  this 
subject  may  be  appropriately  grouped  under  the 
head  of  several  leading  and  distinct  propositions, 
the  first  of  which  may  be  stated  as  follows : 

PERSONAL  PROPERTY  DOES  NOT  FOLLOW  THE 

PERSON  FOR  THE  PURPOSE  OF  TAXATION,  BUT 

CAN  BE  TAXED  WHEREVER  MAY  BE  ITS  SITUS. 

In  support  of  this  assumption,  the  following 
cases  and  rulings  at  law  may  be  cited : 

E 


Go 

1.  (Duer  vs.  Small , 17  Howard’s  Practice,  201 ; 
S.  C.,  7 American  Law  Register,  p.  500.)  In 
this  case,  before  the  Circuit  Court  of  the  United 
States  for  the  Southern  District  of  New  York, 
the  plaintiff,  a citizen  of  New  Jersey,  engaged  in 
banking  business  in  New  York  city,  was  taxed 
on  personal  property  in  New  York,  under  a stat- 
ute of  that  State  which  provided,  “ that  all  per- 
sons doing  business  in  New  York,  as  merchants, 
bankers,  or  otherwise,  and  not  residents  of  the 
State,  shall  be  assessed  and  taxed  on  all  sums  in- 
vested in  their  business,  the  same  as  if  they  were 
residents  of  the  State.”  The  assumption  of  the 
plaintiff  was,  that  the  law  of  New  York  was  in 
violation  of  the  Constitution  of  the  United  States. 
The  Court  (Ingersol,  J.)  sustained  the  validity  of 
the  tax,  on  the  ground  that  the  property  taxed  was 
within  the  State  and  received  the  protection  of  its 
laws,  and  that  it  was  right  that  the  owner  should 
afford  the  State  a recompense,  or  consideration,  for 
such  protection.  “ There  is  no  higher  law  of  the 
United  States  which  gives  a non-resident  the  right 
to  demand  that  the  property  of  the  resident  citi- 
zen should  pay  for  the  protection  afforded  by  the 
laws  to  the  property  of  a non-resident.  The 
equal  ‘ immunities  and  privileges  ’ secured  under 
the  Constitution  to  the  citizens  of  each  State,  in 
the  several  States,  does  not  demand  such  a re- 
quirement as  this.”  It  was  admitted  by  the  com- 
plainant that  the  real  estate  of  a non-resident  is 
liable  to  pay  taxes  for  the  protection  afforded  it 
by  the  State  where  it  is  situated,  and  the  chief 
reason  urged  why  personal  estate  should  not  fol- 
low the  same  rule  was,  that  the  rule  of  law  is  that 
personal  estate  follows  the  person  of  the  owner, 
and  that,  therefore,  it  may  be  taxed  in  the  State 
where  the  owner  is  domiciled.  But  the  Court 
held,  that  if  it  was  so  taxed , it  would  not  follow 
that  it  could  not  be  taxed  in  the  State  where  it 
actually  was,  and  where  protection  was  actually 
afforded  to  it.  “ Bank  stock  is  personal  estate ; 
according  to  the  rule  of  law,  it  follows,  with  all 
other  personal  property,  the  person  of  the  owner. 
Such  stock,  whether  owned  by  a resident  or  non- 
resident, is  usually  taxed  in  the  State  where  the 
bank  is  located.  It  is  believed  that  the  laws  tax- 
ing such  stock  are  not  obnoxious  to  the  charge 
of  being  opposed  to  any  constitutional  law,  either 
State  or  national.  It  would  seem  to  be  enough 
that  the  property  of  a non-resident,  whether  that 
property  be  real  or  personal,  should  be  put  upon 
an  equality,  in  respect  to  taxation,  with  the  prop- 
erty of  a resident,  without  requiring  that  it  should 
have  greater  privileges.” 

“ The  taxing  power  of  a State  is  one  of  its  at- 
tributes of  sovereignty,  and  where  there  has  been 
no  compact  with  the  Federal  Government,  or  ces- 
sion of  jurisdiction  for  the  purposes  specified  in 
the  Constitution,  this  power  reaches  all  the  prop- 
erty within  the  State.” 

2.  A more  important  case  in  support  of  the 
principle  that  personal  property,  when  out  of  the 
State,  does  not  follow  the  person  for  purposes  of 
taxation,  is  to  be  found  in  the  23d  New  York  Re- 
ports, p.  224  ( People  ex  reL  Hoyt  vs.  Commissioner 
of  Taxes').  In  this  case  the  relator  was  assessed 
for  personal  property  in  the  city  of  New  York,  and 
resisted  the  taxation  on  the  ground  that,  although 
he  had  personal  property  outside  of  the  State,  he 
had  none  within  the  State  in  excess  of  his  just 
debts  and  liabilities — the  personal  property  in 
question  without  the  State  being  capital  employ- 


CG 


LOCAL  TAXATION. 


ed  in  business  in  New  Orleans,  and  farm  stock  and 
household  furniture  in  New  Jersey;  each  taxable 
by  law  in  the  places  where  situated.  The  Court 
of  Appeals  decided  the  assessment  to  be  illegal, 
and  held  (Comstock,  Ch.  J.)  that,  under  the  stat- 
utes of  New  York  relating  to  taxation,  the  per- 
sonal property  of  a resident  actually  situated  in 
another  State  or  country  is  not  to  be  included  in 
the  assessment  against  him.  The  illogical  con- 
sequences of  adhering  to  the  usual  theory,  that 
personal  estate  for  the  purposes  of  taxation  has 
no  situs  away  from  the  person  or  residence  of  the 
owner,  but  is  always  deemed  to  be  present  with 
him  at  the  place  of  his  domicile,  were  thus  stated 
by  the  chief-justice  in  rendering  his  opinion : Ac- 
cording to  this  fiction  of  law,  “ goods  and  chattels 
actually  within  this  State  are  not  here  in  any  le- 
gal sense  or  for  any  legal  purpose  if  the  owner 
resides  abroad ; they  can  not  be  taxed  here,  be- 
cause they  are  with  the  owner,  who  is  a subject 
or  citizen  of  some  foreign  state.  On  the  same 
grounds,  if  we  are  to  have  harmonious  rules  of 
law,  we  ought  to  relinquish  the  administration  of 
the  effects  of  a person  resident  and  dying  abroad, 
although  the  claims  of  domestic  creditors  may 
require  such  administration.  So,  in  the  case  of 
the  bankruptcy  of  such  a person,  we  should  at 
once  send  abroad  his  effects,  and  can  not  consist- 
ently retain  them  to  satisfy  the  claims  of  our  own 
citizens.  Again,  we  ought  not  to  have  laws  for 
attaching  the  personal  estate  of  non-residents,  be- 
cause such  laws  necessarily  assume  that  it  has  a 
situs  entirely  distinct  from  the  owner’s  domicile ; 
yet  we  do  in  certain  cases  administer  upon  goods 
and  chattels  of  a foreign  decedent ; we  refuse  to 
give  up  the  effects  of  a bankrupt  until  creditors 
here  are  paid,  and  we  have  laws  of  attachment 
against  the  effects  of  non-resident  debtors.  These, 
and  other  illustrations  which  might  be  mentioned, 
demonstrate  that  the  fiction  or  maxim,  ‘ mobilia 
personam  sequuntur  ’ is  by  no  means  of  universal 
application ; like  other  fictions,  it  has  its  special 
uses ; it  may  be  resorted  to  when  convenience  and 
justice  so  require ; in  other  circumstances,  the 
truth,  and  not  the  fiction,  affords,  as  it  plainly 
ought  to  afford,  the  rule  of  action.  But  these 
rules  apply  only  to  property  which  is  capable  of 
having  an  actual  situs,  and  has  one  within  or 
without  the  State.” 

3.  A denial  of  the  fiction  of  law  that  the  domi- 
cile of  the  owner  draws  to  it  personal  estate 
wherever  the  same  may  happen  to  be,  was  also 
practically  given  by  the  Supreme  Court  of  the 
United  States,  in  the  case  of  Green  vs.  Van  Bus- 
kirlc,  Dec.,  1868  (7  Wallace,  139).  In  this  case 
one  Bates,  who  lived  in  Troy,  N.  Y. , and  owned 
certain  iron  safes  in  Chicago,  Illinois,  in  order  to 
secure  an  existing  debt,  mortgaged  them  to  Yan 
Buskirk,  also  a citizen  of  New  York.  Two  days 
after  this,  one  Green,  also  a creditor  of  Bates, 
sued  out  of  the  proper  court  of  Illinois  a writ  of 
attachment,  caused  it  to  be  levied  on  these  safes, 
got  judgment,  and  sold  the  property.  At  the 
time  of  the  levy  of  this  attachment,  the  mortgage 
had  not  been  recorded  in  Illinois,  nor  had  pos- 
session of  the  property  been  delivered  under  it ; 
both  record  and  delivery  being  necessary  by  the 
laws  of  Illinois,  though  not  by  those  of  New 
York,  to  the  validity  of  the  mortgage  as  against 
third  parties.  In  this  state  of  the  law  in  Illinois, 
Van  Buskirk  sued  Green  in  one  of  the  inferior 
courts  of  New  York  for  taking  and  converting 


the  safes  sold,  as  already  mentioned,  under  the 
attachment.  Green  pleaded  in  bar  the  attach- 
ment proceedings  in  Illinois.  The  New  York 
courts  held  that  the  only  question  was  Yan  Bus- 
kirk’s  property  in  the  safes  on  the  day  of  attach- 
ment; that  the  existence  or  non-existence  of 
such  property  was  to  be  decided  by  the  law  of 
the  domicile  of  the  parties,  and  finally  that,  al- 
though the  property  was  situated  in  Illinois,  yet 
the  title  to  it  by  the  law  of  New  York  was  com- 
plete in  Yan  Buskirk  on  the  execution  of  the 
mortgage.  The  Supreme  Court  of  the  United 
States  reversed  this  decision,  and  held  that  the  fic- 
tion of  law  that  the  domicile  of  the  owner  draws 
to  it  its  personal  estate  wherever  it  may  happen 
to  be,  yields  whenever  for  the  purposes  of  justice 
that  the  actual  situs  of  the  property  shall  be  ex- 
amined. Referring  to  the  case  previously  men- 
tioned, of  Hoyt  vs.  Commissioner  of  Taxes , Mr. 
Justice  Davis  says:  “This  fiction  has  yielded 
in  New  York  on  the  power  of  the  State  to  tax 
the  personal  property  of  one  of  her  citizens 
situated  in  a sister  State,  and  always  yields  to 
laws  for  attaching  the  estate  of  non-residents, 
because  such  laws  necessarily  assume  that  prop- 
erty has  a situs  entirely  distinct  from  the  own- 
er’s domicile.” 

4.  In  the  case  of  Sprague  vs.  The  Town  of 
Lisbon , the  question  at  issue  being  whether  ma- 
chinery in  Connecticut,  personal  property  of  the 
plaintiffs,  citizens  of  Rhode  Island,  and  as  such 
taxable  under  the  laws  of  the  latter  State,  was  also 
taxable  in  Connecticut,  the  Supreme  Court  of  Er- 
rors of  the  State  of  Connecticut  (Hinman,  J.) 
decided  that  the  same  was  properly  taxable  at 
the  place  of  its  actual  situs  and  entirely  irrespect- 
ive of  the  domicile  of  its  owner. 

PERSONAL  PROPERTY  DOES  NOT  FOLLOW  THE 

PERSON,  AND  IN  THE  FORMS  OF  NEGOTIABLE 

INSTRUMENTS  MAY  BE  TAXED  IN  THE  DOMI- 
CILE OF  THE  DEBTORS,  OR  WHERE  ACTUAL- 
LY FOUND. 

In  the  foregoing  cases,  the  questions  decided 
have  all  had  reference  to  the  situs  of  such  person- 
al property  as  goods,  machinery,  and  chattels 
which  are  clearly  visible;  but  that  personal 
property  also,  in  the  form  of  negotiable  instru- 
ments, does  not  follow  the  person  for  the  pur- 
poses of  taxation  would  seem  to  be  sustained  by 
the  following  facts  and  decisions : 

1.  England,  Austria,  and  Italy  tax  the  non- 
resident holders  of  their  national  debts  at  the 
place  where  the  debt  is  held  to  have  been  created 
or  is  now  inscribed. 

2.  Attachments  or  processes  of  law  are  valid 
against  all  personal  property  in  the  nature  of  ne- 
gotiable instruments  in  the  place  where  such  in- 
struments are  situate,  irrespective  of  the  domicile 
or  residence  of  the  owner. 

3.  In  the  case  of  Maltby  vs.  Reading  Railroad 
Co.  (Smith,  Penn.  Reports),  the  plaintiff,  a non- 
resident in  the  State  of  Pennsylvania,  resisted 
State  taxation  on  a railroad  bond  issued  by  the 
defendants  and  secured  by  a mortgage  on  their 
road,  on  the  general  ground  that  the  property 
taxed  was  wholly  personal,  and  followed  the  own- 
er out  of  the  State.  The  court  (Woodward,  C. 
J.)  sustained  the  taxation  on  the  ground  that  a 
railroad  mortgage  bond  is  a mere  paper  evidence 
of  property  existing  at  the  place  where  the  bond 
was  created,  and  used  the  following  language : 


APPENDIX. 


“ The  plaintiff  can  not  enforce  the  bond  where  he 
lives ; he  must  come  here,  to  gather  its  fruits  ; it 
is  founded  upon  and  derives  its  value  from  a mort- 
gage, but  that  mortgage  is  here,  and  the  franchise 
and  properties  which  the  mortgage  binds  are 
here  within  our  jurisdiction.  The  bond  signifies 
his  right  to  receive  so  much  money  out  of  the 
mortgaged  estate,  but  that  estate  not  only  belongs 
to  our  jurisdiction  but  was  in  part  created  by  our 
authority.” 

4.  In  the  case  of  Pelham  vs.  Rose  (9  Wallace, 
106),  it  was  held  by  the  Supreme  Court  of  the 
United  States,  that  a promissory  note  is  a physical 
thing,  capable  of  possession,  and  can  riot  be  re- 
garded as  attached  by  a United  States  marshal, 
until  the  note  itself  was  actually  seized  and  taken 
into  the  custody  and  control  of  the  officer ; hence 
the  inference  that  a negotiable  instrument  of  this 
character  has  a situs  of  its  own,  and  does  not,  as 
personal  property,  follow  the  owner. 

5.  In  the  case  of  the  Ohio  and  Mississippi 
Railroad  vs.  Wheeler  (1  Black  U.  S.  Reports, 
286),  it  was  held  that  when  a corporation  is 
created  by  the  laws  of  a State,  the  legal  presump- 
tion is  that  its  members  are  citizens  of  the  State 
in  which  alone  the  corporate  body  has  legal  exist- 
ence; hence  the  inference  seems  warranted  that 
the  stock  of  a corporation  does  not  follow  the 
person. 

6.  In  the  case  of  McNeilage  vs.  Holloway  (1 
Barnwell  & Allison’s  Reports,  218),  the  Court  of 
King’s  Bench,  Lord  Ellenborough,  C.  J.,  presid- 
ing, it  was  decided  that  negotiable  instruments 
are  chattels  personal,  and  that  a negotiable  note 
payable  to  the  order  of  an  unmarried  woman  be- 
comes the  property  of  her  husband  upon  mar- 
riage, without  her  indorsement ; on  the  ground 
that  it  is  not  a chose  in  action , but  a chattel  per- 
sonal. If  this  decision,  which  is  the  law  of  Eng- 
land, is  correct,  it  would  seem  to  follow  that  all 
negotiable  instruments  of  this  character  have  their 
situs  in  the  place  where  they  are  found,  and  fol- 
low the  same  rule,  as  respects  taxation  and  at- 
tachment, as  applies  to  other  chattels  personal. 
Taxation,  consequently,  imposed  on  all  species 
of  property  of  this  nature  in  States  where  the 
property  is  not  actually  existing,  is  unconstitution- 
al, as  much  so  as  it  would  be  to  tax  real  estate  and 
farm  stock — cows,  horses,  etc. — in  one  State,  that 
are  situated  in  another  State. 

7.  “In  truth  such  instruments  (negotiable  in- 
struments) are  treated  not  as  mere  choses  in  ac- 
tion, but  rather  as  chattels  personal.  Choses  in 
action  are  not  assignable  by  law,  and  actions 
must  be  brought  thereon  in  the  name  of  the  orig- 
inal parties.  But  negotiable  notes  are  transfera- 
ble by  indorsement ; and  when  transferred  the 
indorser  may  sue  in  his  own  name.” — Story’s 
Conflict  of  'Laws , § 359.  “A  title  to  personal 
property  duly  acquired  by  the  lex  loci  rei  situ  will 
be  deemed  valid  and  be  respected  as  a lawful  and 
perfect  title  in  every  other  country.  The  like 
principle  will  apply  where  an  executor  or  admin- 
istrator, in  virtue  of  an  administration  abroad,  be- 
comes there  possessed  of  negotiable  notes  belong- 
ing to  the  deceased,  which  are  payable  to  bearer ; 
for  then  he  becomes  the  legal  owner  and  bearer 
by  virtue  of  his  administration,  and  may  sue 
. thereon  in  his  own  name,  and  he  need  not  take 
out  letters  of  administration  in  the  State  where  the 
debtor  resides,  in  order  to  maintain  a suit  against 
him.” — Story’s  Conflict  of  Laws , §§  516  and 


67 

517 ; the  same  principle  in  Robinson  vs.  Cran- 
dall, 9 Wendell  R.,  425. 

8.  Negotiable  instruments  have  a situs  wherever 
they  may  be  located. 

In  the  case  of  The  Attorney  - General  vs. 
Bouvens  (4  Meesson  & Welsby,  171,  190,  191, 
192),  Lord  Abinger,  in  1838,  in  giving  the  opin- 
ion of  the  court,  seems  to  have  decided  clearly 
and  explicitly  that  Russian,  Danish,  and  Dutch 
government  bonds,  payable  to  bearer,  have  a 
situs  where  they  are  actually  situated , and  may 
there  be  taxed  for  probate  duty.  He  says,  “ such 
an  instrument  is  in  effect  a salable  chattel , and 
follows  the  nature  of  other  chattels  as  to  the  ju- 
risdiction to  grant  probate.”  He  cited  the  case 
of  Attorney  General  vs.  Hope , decided  in  the 
House  of  Lords,  where  it  was  held  that  registered 
stocks  of  the  State  of  New  York  and  the  United 
States,  owned  by  an  Englishman  dying  in  Eng- 
land, were  not  subject  to  probate  duty,  on  the 
ground  that  they  were  not  negotiable  instruments 
which  pass  by  delivery,  and  which  are  chattels 
personal , having  a situs  where  found ; and  that 
the  application  of  the  probate  duty  depends  upon 
the  physical  question  of  locality.  In  England 
negotiable  instruments  are  subject  to  attachment 
and  sale,  and  since  the  enactment  of  1 and  2 Vic., 
ch.  110,  § 12,  are  subject  to  execution,  and  it 
seems  to  be  a wrell-settled  principle  of  law  in  that 
and  this  country,  that  such  instruments  have  a 
situs  and  may  be  proceeded  against  in  rem. 

In  fact,  this  class  of  instruments  could  not  con- 
tinue to  exist  as  agencies  of  commerce  and  as 
forms  of  investment,  if  it  was  decided  that  they 
did  not  have  a situs  where  found.  If  the  situs 
of  a bond,  payable  to  bearer,  is  not  with  a vend- 
or, he  can  not  convey  title  in  a case  of  sale  to  a 
bona  fide  purchaser.  Certainly  no  prudent  man 
would  buy  negotiable  instruments  in  open  mar- 
ket, if  he  was  liable  to  be  confronted  by  a claim- 
ant who  alleged  that,  at  the  time  of  the  purchase 
in  such  market,  he  was  the  owner  of  the  negotia- 
ble instrument,  and  a resident  of  a different  dis- 
trict, State  or  country  where  was  the  situs  of  the 
instrument,  and  where  was  consequently  the  le- 
gal title. 

9.  In  New  York,  bank-notes  are  subject  to  ex- 
ecution, and  all  forms  of  negotiable  instruments 
are  subject  to  attachment  and  sale  as  the  proper- 
ty of  non-resident  debtors.  In  case  of  attach- 
ment, we  sell  the  available  value  of  these  instru- 
ments in  the  market ; we  do  not  proceed  against 
the  debtors ; we  sell  the  instruments  as  chattels. 
It  would  seem  that  the  constitutionality  of  the 
attachment  laws  of  the  various  States  against 
negotiable  instruments  can  not  be  seriously  ques- 
tioned. The  situs  is  the  main  element  in  a ne- 
gotiable instrument  payable  to  bearer ; and  the 
decision  of  the  United  States  Court  in  the  case 
of  Railroad  vs.  Jackson  (7  Wallace,  262),  that 
double  taxation,  by  different  States,  is  unconsti- 
tutional, seems  to  decide,  in  harmony  with  the 
decisions  in  England  and  on  the  Continent,  that 
the  State  where  the  actual  situs  of  negotiable  in- 
struments (not  in  transitu ) is,  must  be  the  only 
place  where  a constitutional  tax  can  be  levied ; 
and  that  in  case  of  conflict  of  jurisdiction  ( Green 
vs.  Van  Buskirk ),  the  actual  situs  must  control. 

10.  Again,  the  principle  that  a State  or  sover- 
eignty can  exercise  sovereignty  for  taxation  over 
any  negotiable  instruments  situated  within  its  ter- 
ritory, and  without  any  regard  to  the  citizenship 


68 


LOCAL  TAXATION. 


or  domicile  of  their  owners,  finds  confirmation  in 
a recent  provision  that  has  been  adopted  by  the 
authorities  of  Great  Britain,  in  reference  to  the 
British  stamp  act.  By  this  provision  it  is  re- 
quired, that  every  security  of  a foreign  or  colo- 
nial government,  municipal  body,  corporation,  or 
company,  bearing  date  after  the  3d  of  J une, 
1862,  made  or  issued  in  the  United  Kingdom, 
or  upon  which  interest  is  payable,  or  which  is 
negotiated  in  any  way  within  Great  Britain, 
must  bear  an  ad  valorem  stamp  of  one-eighth 
per  cent.  The  words  of  the  act  cover  all  varie- 
ties of  foreign  and  colonial  securities ; not  only 
such  as  may  be  regarded  in  the  light  of  public 
securities,  but  also  those  of  private  corporations 
and  companies.  The  clauses  of  the  act  refer- 
red to  are  to  the  following  purport : “The  term 
foreign  securities  means  and  includes  every  se- 
curity for  money  by  or  in  behalf  of  any  foreign 
or  colonial  state,  government,  municipal  body, 
corporation,  or  company,  bearing  date  or  signed 
after  the  3d  day  of  June,  1862  (except  an  instru- 
ment chargeable  with  duty,  as  a bill  of  exchange 
or  promissory  note) : 1.  Which  is  made  or  issued 
within  the  United  Kingdom ; 2.  Upon  which  any 
interest  is  payable  in  the  United  Kingdom ; 3. 
Which  is  assigned,  transferred,  or  in  any  man- 
ner negotiated  within  the  United  Kingdom. 
Every  person  who,  within  the  United  Kingdom, 
makes,  issues,  transfers,  negotiates,  or  pays  any 
interest  upon  any  foreign  security,  not  being 
dulv  stamped,  shall  forfeit  the  sum  of  £20.” — 
Chi' 97,  33  and  34  Viet.,  1870. 

PERSONAL  PROPERTY  FOLLOWS  THE  PERSON 
OUT  OF  THE  STATE. 

The  principle  that  personal  property  does  fol- 
low the  person  out  of  the  State,  and  that  non- 
resident stockholders,  therefore,  can  not  be  tax- 
ed on  dividends  in  a corporation  within  the 
State,  finds  support  in  the  following  decisions  : 

Oliver  vs.  Washington  Mills , 11  Allen  (Map 
Reports),  p.  268,  in  which  it  was  held  that  non- 
resident stockholders  can  not  be  taxed  on  their 
dividends  in  Massachusetts,  on  the  ground  that 
they  are  liable  to  taxation  in  the  States  where 
they  reside,  and  a taxation  in  Massachusetts 
would  amount  to  a discriminating  or  double  tax- 
ation on  non-resident  holders  of  stock  in  such 
corporations. 

And  in  the  case  of  McKeen  vs.  Northampton 
Co .,  13  Wright  (Penn.  Reports,  p.  519),  it  was 
held,  that  every  citizen  of  the  State  and  all  the 
property  accompanying  him  personally,  or  falling 
legitimately  within  the  territorial  limits  of  the 
State,  is  subject  to  the  power  of  taxation.  The 
interest  which  a stockholder  has  in  the  stock  of 
a corporation  is  personal,  and  is  controlled  by  the 
law  of  his  domicile.  Capital  stock  owned  by  a 
citizen  of  Pennsylvania  in  a manufacturing  cor- 
poration located  in  another  State  is  taxable  in 
Pennsylvania  for  State  and  county  purposes. 

The  following  decisions  of  the  highest  courts, 
positively  determining,  or  looking  to,  the  exemp- 
tion of  certain  species  of  personal  property  from 
taxation,  as  well  as  determining  the  situs  of  oth- 
er species  of  such  property  for  the  purposes  of 
taxation,  also  constitute  an  important  department 
of  the  subject  under  consideration. 

1st.  No  State  can  tax  goods  imported  from  for- 
eign countries  in  the  hands  of  the  importer  and  in 
the  original  and  unbroken  packages.  This  ques- 


tion was  decided  bv  Chief-justice  Marshall  in  the 
case  of  Brown  vs.  Maryland  (12  Wheaton,  449). 
The  question  was  upon  the  legality  of  a license- 
tax  imposed  by  the  State  upon  a merchant  as  a 
prerequisite  of  the  right  to  sell  an  imported  arti- 
cle. The  court  held  that  this  tax,  though  indi- 
rect in  form,  was  in  fact  a duty  on  imports,  and 
therefore  illegal. 

2d.  The  goods  of  a non-resident  owner  sent  to 
New  York  for  sale , without  re-investment  of  the 
proceeds , are  not  liable  to  taxation  as  personal 
property.  In  the  case  of  the  Parker  Mills  vs. 
Commissioners  of  Taxes  of  the  City  of  New  York 
(23  New  York  Reports,  p.  242^),  it  appeared  that 
the  relator  was  a corporation  foreign  to  New 
York,  manufacturing  nails  in  the  State  of  Mas- 
sachusetts, with  a depot  and  agent  in  the  city  of 
New  York,  to  whom  the  nails  were  transmitted 
for  sale.  Its  only  business  within  the  State  of 
New  York  consisted  in  making  such  sales,  the 
proceeds  of  which  were  remitted  at  once  to  the 
corporation  in  Massachusetts ; and  when  sales 
were  made  upon  credit,  the  securities  received 
were  sent  to  the  corporation  for  collection.  The 
tax  commissioners  of  New  York  city  held  that 
the  corporation  was  conducting  business  in  the 
city,  and  assessed  it  on  the  value  of  the  nails  in 
store,  regarding  that  value  as  the  amount  or  sum 
invested  in  said  business  in  New  York.  The 
Supreme  Court  affirmed  the  proceedings,  but  the 
Court  of  Appeals  (Selden,  J.),  June,  1861,  re- 
versed the  decision,  and  held  that  the  case  was 
not  included  in  the  act  of  the  State,  chapter  37 
of  1855,  section  1,  which  was  designed  to  reach 
the  capital  of  non-residents  employed  within  the 
State  in  a continuous  business  ; and  that  it  was 
never  the  policy  of  the  State  to  impose  taxes  upon 
property  sent  into  its  territory  for  the  mei'e  pur- 
pose of  sale.  The  court  further  held  the  goods 
sold  by  the  agent  of  the  Parker  Mills  to  be  prop- 
erty in  transitu ; the  same  in  principle  with  the 
case  of  a drover,  resident  of  another  State,  who 
transports  his  herds  of  cattle  by  railroad  to  the 
city  of  New  York  for  sale.  Since  the  decision  in 
the  above  case,  firms  or  corporations  established 
in  other  States,  but  selling  their  own  goods  ex- 
clusively in  New  York,  although  permanently  lo- 
cated for  such  purposes  of  sale  in  respect  to  their 
stores,  warehouses,  or  agents,  have  been  held  to 
be  exempt  from  taxation.  It  is,  however,  to  be 
observed  that  the  decision  in  this  case  turned 
upon  the  assumption  by  the  court  that  the  law 
of  New  York,  providing  for  the  taxation  of  non- 
residents doing  business  permanently  in  New 
York,  did  not,  at  the  same  time,  authorize  the 
taxation  of  property  in  transitu , but  did  not  dis- 
cuss or  question  the  right  of  the  State  to  tax  such 
property  in  transitu , in  case  the  same  should  be 
deemed  expedient. 

Since  the  rendering  of  this  decision,  such  a 
right,  however,  on  the  part  of  a State  to  tax* 
goods  brought  within  its  borders  from  other 
States  exclusively  for  sale,  provided  that  similar 
taxation  is  imposed  on  like  property,  the  product 
of  its  own  citizens,  has  been  affirmed  by  the  Su- 
preme Court  of  the  United  States  in  the  case  of 
Woodruff  vs.  Parham  (8  Wallace,  138).  In  this 
case  the  city  of  Mobile,  Alabama,  taxed  sales  of 
merchandise  for  municipal  purposes,  which  tax 
was  resisted  by  Woodruff  and  others,  auction- 
eers, who,  as  consignees,  received  goods  and  mer- 
chandise, the  products  of  States  other  than  Ala- 


APPENDIX. 


69 


bama,  and  sold  the  same  in  Mobile  to  purchasers 
in  the  original  and  unbroken  packages.  The 
payment  of  the  tax  was  resisted  on  the  ground 
that  it  was  repugnant  to  the  provisions  of  the 
Constitution,  which  ordain  that 

“Congress  shall  have  power  to  regulate  com- 
merce among  the  several  States.” 

“ No  State  shall  levy  any  imposts  or  duties  on 
imports  or  exports.” 

“The  citizens  of  each  State  shall  be  entitled 
to  all  the  immunities  and  privileges  of  the  citi- 
zens of  the  several  States.  ” 

At  the  same  time  another  similar  case  was 
presented  to  the  consideration  of  the  court  (. Hin- 
son vs.  Locke),  in  which  the  collection  of  a State 
tax  on  whisky,  so  far  as  the  same  was  sought  to 
be  made  applicable  to  whisky  manufactured  in 
another  State,  and  consigned  to  an  agent  in  the 
State  of  Alabama  for  sale,  was  contested.  It  is, 
however,  to  be  here  stated,  that  the  taxes  in 
both  these  instances  were  not  discriminating 
taxes  against  the  imported  products  of  sister 
States,  but  were  made  applicable  alike  to  all 
goods  of  a similar  character  produced  within  the 
State. 

The  court  affirmed  the  legality  of  the  taxes  in 
question,  and  held,  by  Mr.  Justice  Miller,  that  the 
term  import,  as  used  in  that  clause  of  the  Con- 
stitution which  says  “that  no  State  shall  levy 
any  imposts  or  duties  on  imports  or  exports,” 
does  not  refer  to  articles  imported  from  one 
State  into  another,  but  only  to  articles  imported 
from  foreign  countries  into  the  United  States ; 
hence  a uniform  tax  imposed  by  a State  on  all 
sales  made  in  it,  whether  they  be  made  by  its 
own  citizens  or  the  citizens  of  some  other  State, 
and  whether  the  goods  sold  are  the  produce  of 
the  State  enacting  the  law,  or  of  some  other 
State,  is  valid. 

From  the  judgment  thus  affirmed,  Judge  Nel- 
son dissented,  and,  in  an  opinion  of  great  force 
and  ability,  said : “lam  unable  to  agree  to  judg- 
ment of  the  court  in  this  case ; the  valid  question 
is,  whether  the  State  can  tax  the  sale  of  an  arti- 
cle, the  product  , of  a sister  State,  in  the  original 
package,  when  imported  into  the  former  for  a 
market,  under  the  Constitution  of  the  United 
States.  If  she  can,  then  no  security  or  protec- 
tion exists  in  this  Government  against  obstruc- 
tions and  interruptions  of  commerce  among  the 
States;  and  one  of  the  principal  grievances  that 
led  to  the  convention  of  1787,  and  to  the  adoption 
of  the  Federal  Constitution,  has  failed  to  be  reme- 
died by  that  instrument ; and  hereafter  (for  this 
is  the  first  time  since  its  adoption  that  the  clause 
in  question  has  received  the  interpretation  now 
given  to  it),  this  interstate  commerce  is  necessa- 
rily left  to  the  regulation  of  the  Legislatures  of 
the  different  States.”  “The  State  of  Pennsyl- 
vania,” for  illustration,  said  the  judge,  “supplies 
New  York  with  the  article  of  coal  from  her  mines. 
According  to  the  judgment  of  the  Court  in  the 
present  case,  the  State  of  New  York  may  tax 
these  sales  if  she  makes  no  discrimination,  and 
such  a law  may  be  passed  and  enforced  without 
imposing  any  burden  on  her  own  people,  as  there 
is  no  coal  of  any  value  in  the  State  but  what  is 
brought  into  it  from  abroad.  So,  in  turn,  Penn- 
sylvania can  tax  the  salt  and  plaster  of  New  York 
carried  into  that  State  with  a like  impunity  to  her 
people ; Massachusetts  may  tax  the  grain  and 
flour  of  the  West  carried  into  the  State  by  a like 


law,  as  she  does  not  raise  a sufficient  supply  for 
home  consumption,  and  a general  tax  upon  all 
sales  would  not  harm  her  people.” 

It  is  impossible,  furthermore,  in  considering  the 
decision  of  the  court  sustaining  the  legality  of 
this  tax,  to  resist  the  conviction  that  the  prevail- 
ing  idea  in  the  mind  of  the  judge  who  gave  the 
opinion,  and  the  idea  possibly  which  constitutes 
the  basis  of  this  seemingly  anomalous  and  extra- 
ordinary decision,  was  that  it  was  necessary  for 
the  interests  of  the  State  to  enlarge  to  the  fullest 
extent  the  power  for  the  taxation  of  personal 
property,  and  that  the  question  did  not  come  up 
for  consideration  whether  the  interests  of  the 
State  would  not  be  more  fully  subserved  by  free- 
ing the  movement  and  interchange  of  property 
from  all  restrictions,  and  assessing  the  taxes 
requisite  for  the  purposes  of  raising  revenue  upon  • 
more  tangible  and  less  objectionable  objects. 

3d.  Ships  at  sea  have  no  situs  other  than  at  the 
port  at  which  they  are  registered.  In  the  case  of 
Hoyt  vs.  The  Commissioners  of  Taxes  of  New  York 
City , the  Court  of  Appeals  of  New  York  (Corn- 
stock,  Ch.  J.)  expressed  the  opinion  that  ships  at 
sea  can  have  no  situs  other  than  the  port  at  which 
they  are  registered,  and  are  justly  taxable  to  the 
owner  as  personal  property,  at  such  places  of  reg- 
istry only.  The  laws  of  the  United  States  also 
provide  that  a mortgage  on  a ship  can  be  exe- 
cuted only  at  the  port  where  the  ship  is  registered ; 
yet,  notwithstanding,  it  is  the  usual  practice  in 
New  York  and  elsewhere  to  assess  ships  as  per- 
sonal property  to  their  owners  at  the  place  of  the 
owner’s  domicile. 

In  the  case  of  The  City  of  New  Albany  vs.  Mee- 
kin  (3  Ind.  R.,  p.  481),  this  question  has  been 
made  the  subject  of  a legal  decision.  The  defend- 
ant was  a resident  of  New  Albany,  and  was  assess- 
ed for  personal  property  in  respect  to  a steamboat 
enrolled  at  Louisville,  Kentucky,  and  which  touch- 
ed only  occasionally  at  New  Albany.  It  was 
held  that  the  tax  was  illegal,  the  Supreme  Court 
observing  that  “ the  only  question  we  have  to 
consider  is  whether  the  boat  or  the  defendant’s 
share  is  within  the  city.” 

In  the  case  of  Haysxs.  The  Pacific  Mail  Steam- 
ship Company  (17  Howard,  713),  in  which  the 
Company  resisted  taxation  on  their  vessels  by  the 
city  of  San  Francisco,  the  Supreme  Court  of  the 
United  States  declared  the  taxation  illegal,  for 
the  following  reasons : The  provisions  of  the  acts 
of  Congress,  31st  December,  1792,  and  29th  July, 
1850,  1 1 very  clearly  indicate  that  the  domicile  of 
a vessel  that  requires  to  be  registered,  if  we  may 
so  speak,  or  home  port,  is  the  port  at  which  she 
is  registered,  and  which  must  be  the  nearest  to 
the  place  where  the  owner  or  owners  reside.  In 
this  case  the  home  port  of  the  vessels  was  the 
port  of  New  York,  where,  it  is  admitted,  the  capi- 
tal invested  is  subject  to  State,  county,  and  other 
local  taxes.  We  are  satisfied  that  the  State  of 
California  had  no  jurisdiction  over  these  vessels 
for  the  purpose  of  taxation.  They  were  there 
but  temporarily,  with  their  situs  at  the  home  port, 
where  the  vessels  belonged,  and  where  the  own- 
ers were  liable  to  be  taxed  for  the  capital  invest- 
ed.” 

4th.  Two  States  can  not  tax  at  the  same  time 
the  same  property , nor  can  a State  tax  property 
and  interests  lying  beyond  her  jurisdiction.  This 
principle  was  affirmed  by  the  Supreme  Court  of 
the  United  States,  December,  1868,  in  the  case  of 


70 


LOCAL  TAXATION. 


The  Northern  Central  Railroad  vs.  Jackson  (7  j 
Wallace,  262).  The  railroad  corporation  in  ques-  J 
tion,  extending  from  Baltimore,  in  Maryland,  to 
Sunbury,  in  Pennsylvania,  was  the  result  of  the 
consolidation  of  four  railroad  companies  ; one  in- 
corporated by  the  State  of  Maryland,  and  three  by 
the  State  of  Pennsylvania.  The  latter  State  im- 
posed a tax  of  three  mills  per  dollar  of  the  prin- 
cipal of  each  bond  issued  by  said  road,  which 
tax  the  company,  at  their  office  in  Baltimore,  de- 
ducted from  the  coupons  of  the  bonds  of  said 
consolidated  road  held  by  Jackson,  an  alien,  res- 
ident in  Ireland.  The  court,  by  Mr.  Justice  Nel- 
son, decided  adversely  to  the  tax,  on  the  ground 
that  the  bonds  were  issued  upon  the  credit  of  the 
line  of  the  road,  a portion  of  which  was  within 
the  jurisdiction  of  the  State  of  Maryland,  and 
that  the  security,  bound  and  pledged  for  the  pay- 
ment of  the  bonds  and  of  the  interest  on  them, 
embraces  the  Maryland  portion  of  the  road  equal- 
ly with  that  portion  situated  in  the  State  of  Penn- 
sylvania ; respecting  which  condition  of  affairs, 
the  court  used  the  following  language : 

“It  is  apparent,  if  the  State  of  Pennsylvania 
is  at  liberty  to  tax  these  bonds,  that  to  the  extent 
of  this  Maryland  portion  of  the  road  she  is  tax- 
ing property  and  interest  beyond  her  jurisdiction. 
Again,  if  Pennsylvania  can  tax  these  bonds,  upon 
the  same  principle  Maryland  can  tax  them  ; this 
is  too  apparent  to  require  argument.  The  con- 
sequence of  this,  if  permitted,  would  be  double 
taxation  of  the  bond-holder ; the  effect  of  this  tax- 
ation is  readily  seen  ; a tax  of  three  mills  per 
dollar  of  the  principal,  at  an  interest  of  six  per 
centum,  payable  semi-annually,  is  ten  per  centum 
per  annum  of  the  interest;  a tax,  therefore,  by 
each  State,  at  this  rate,  amounts  to  an  annual  re- 
duction from  the  coupons  of  twenty  per  centum ; 
and  if  this  consolidation  of  the  line  of  the  road 
had  extended  into  New  York  or  Ohio,  or  into 
both,  the  deduction  would  have  been  thirty  or 
forty.  • If  Pennsylvania  must  tax  bonds  of  this 
description , she  must  confine  it  to  bonds  issued 
exclusively  by  her  own  corporations.  Our  con- 
clusion is,  that  to  permit  the  deduction  of  the 
tax  from  the  coupons  in  question  would  be  giv- 
ing effect  to  the  acts  of  the  Pennsylvania  Legisla- 
lature  upon  property  and  interest  lying  beyond  her 
jurisdiction .” 

5th.  Taxation  of  Interstate  Instruments. — In 
the  case  of  Almy  vs.  California  (24  Howard, 
U.  S.  Reports,  p.169),  it  was  held  that  taxation  by 
States  of  bills  of  lading  was  a tax  on  commerce 
between  the  States,  or  a tax  on  foreign  commerce, 
and  therefore  illegal.  This  case  arose  under  a 
statute  of  California,  which  imposed  a stamp-tax 
on  bills  of  lading  for  the  transportation  of  gold 
and  silver  from  any  point  within  the  State  to  any 
point  without  the  State.  The  question,  as  pre- 
sented to  the  Supreme  Court  of  the  United  States 
under  this  statute,  was  stated  to  be  as  follows : Is 
this  stamp-act,  so  required  to  be  paid  by  State 
authority,  an  import,  or  an  export,  within  the 
meaning  of  the  constitutional  prohibition  upon 
the  States?  It  was  held  by  a unanimous  bench 
that  the  tax  fell  within  the  terms  of  the  prohibi- 
tion, or  was  in  conflict  with  the  clause  of  the 
Constitution  giving  Congress  the  right  to  regulate 
commerce  writh  foreign  nations.  In  a subsequent 
review  of  this  case,  1868,  Mr.  Justice  Miller 
stated  that  the  case  was  well  decided,  but  on  a 
different  ground,  viz.:  “That  such  a tax  was  a 


regulation  of  commerce — a tax  imposed  on  the 
transportation  of  goods  from  one  State  to  another , 
over  the  high  seas,  in  conflict  with  that  freedom 
of  transit  of  goods  and  persons  between  one  State 
and  another,  which  is  within  the  rule  laid  down  in 
Crandall  vs.  Nevada  (6  Wallace,  U.  S.  Reports, 
382),  and  with  the  authority  of  Congress  to  reg- 
ulate commerce  among  the  States.”  It  therefore 
follows  that  bills  of  lading  given  for  goods  trans- 
ported from  one  State  to  another  are  interstate 
instruments , and  as  such  can  not  be  subjected  to 
State  taxation ; and  it  would  further  seem  that 
bills,  drafts,  bonds,  etc.,  made  in  one  State,  and 
payable  in  another,  are  similar  interstate  instru- 
ments of  commerce,  and  as  such  can  not  be  tax- 
ed by  State  authority  any  more  than  bills  of  lad- 
ing, the  taxation  of  which  by  States,  as  above 
shown,  has  been  decided  to  be  unconstitutional. 

Can  instrumentalities  of  one  State  be  taxed  by 
another  State  ; or , if  they  can , is  such  taxation  ex- 
pedient ? The  U.  S.  Supreme  Court  has  decided 
that  U.  S.  Bonds  are  national  instrumentalities, 
and  as  such  can  not  be  taxed  by  State  authority ; 
and  in  the  case  of  Day  vs.  Buffington , Judge  Clif- 
ford (U.  S.  Circuit  Court, Mass.  District ) recent- 
ly decided  that  State  instrumentalities  can  not  be 
taxed  by  the  General  Government.  If  this  de- 
cision should  be  affirmed,  the  suggestion  is  per- 
tinent whether  it  would  not  legitimately  follow 
that  the  instrumentalities  of  one  State  (State, 
county,  city,  and  town  bonds)  can  not  be  taxed 
by  another  State.  But  if  such  taxation  is  con- 
stitutional, is  it  not  at  the  same  time  inexpedi- 
ent, and  an  unfriendly  act  towards  a sister  State, 
especially  when  it  is  remembered  that  some  of 
the  States  issue  their  State  and  municipal  obli- 
gations exempt  from  all  taxation  ? Does  not 
comity  and  good  neighborhood  require  that  the 
instrumentalities  of  one  State  should  be  respect- 
ed by  all  the  others,  as  a part  of  the  sovereignty 
of  the  State  creating  the  instrument  in  question  ? 

When  a State  imposes  a tax  on  its  own  obli- 
gations, or  on  the  obligations  of  its  municipali- 
ties, it,  in  effect,  taxes  its  own  borrowing  power, 
and  to  the  extent  of  the  tax  reduces  the  value  of 
the  bonds 'or  obligations  when  issued;  and  the 
State  thus  unnecessarily  defrays  the  expense  of 
the  assessment,  collection,  and  disbursement  of 
an  odious  and  inquisitorial  tax  without  deriving 
the  least  advantage  from  the  imposition  of  the 
tax.  This  sound  principle  of  political  economy 
has  been  judicially  confirmed  and  approved  in 
the  United  States  Court  in  Weston  vs.  The  City 
Council  of  Charleston,  2 Peters,  442,  where  the 
Court  held  that  a State  or  municipal  tax  on  an 
individual  for  government  stock  was  a tax  on 
the  “ borrowing  power  ” of  the  United  States. 
It  seems,  therefore,  that  all  taxes  levied  on  evi- 
dences of  debt  are,  in  effect,  merely  burdens  on 
borrowers,  who  are  usually  the  persons  least  able 
to  sustain  the  weight  of  taxation. 

The  following  considerations  of  a general  na- 
ture respecting  the  situs  of  personal  property,  for 
the  purposes  of  taxation,  are  also  worthy  of  con- 
sideration. 

Judge  Story,  referring  to  the  situs  of  goods  and 
chattels,  observes  : ‘ ‘A  nation  within  whose  ter- 
ritory any  personal  property  is  actually  situated 
has  entire  dominion  over  it  while  therein,  in  point 
of  sovereignty  and  jurisdiction,  as  it  has  over 
immovable  property  situated  there.” — Conflict  of 
Laws , § 550. 


APPENDIX. 


Chief-justice  Comstock,  in  the  case  of  Hoyt  vs. 
The  Commissioners  of  Taxes  of  the  City  of  New 
York , also  says:  “There  seems  to  be  no  place 
for  the  fiction  ” .(that  personal  property  follows 
the  owner)  “in  a well-adjusted  system  of  taxa- 
tion. In  such  a system  a fundamental  requisite 
is  that  it  be  harmonious  ; but  harmony  does  not 
exist  unless  the  taxing  power  is  exerted  with  ref- 
erence exclusively  either  to  the  situs  of  the  prop- 
erty or  to  the  residence  of  the  owner.  Both 
rules  can  not  obtain,  unless  we  impute  inconsis- 
tency to  the  law,  and  oppression  to  the  taxing 
power.  Whichever  of  these  rules  is  the  true 
one,  whichever  we  find  to  be  founded  in  justice 
and  the  reason  of  the  thing,  it  necessarily  ex- 
cludes the  other;  because  we  ought  to  suppose, 
indeed  we  are  bound  to  assume,  that  other  States 
and  Governments  have  adopted  the  same  rule. 
If  then,  proceeding  on  the  true  principles  of  tax- 
ation, we  subject  to  its  burdens  all  goods  and 
chattels  actually  within  our  jurisdiction,  without 
regard  to  the  owners  domicile,  it  must  be  un- 
derstood that  the  same  rule  prevails  everywhere. 
If  we  proceed  on  the  opposite  rule,  and  impose 
the  tax  on  account  of  the  domicile,  without  re- 
gard to  the  actual  situs , while  the  same  property 
is  taxed  in  another  sovereignty  by  reason  of  its 
situs,  then  we  necessarily  subject  the  citizen  to  a 
double  burden  of  taxation  ; and  for  this  no  sound 
reason  can  be  given.” 

“ To  put  a strong  case : The  owner  of  a South- 
ern plantation,*  with  slaves  upon  it,  may  prefer 
to  reside  and  spend  his  income  in  New  York ; 
our  laws  protect  him  in  his  person  as  a citizen 
of  the  State,  and  for  this  the  State  receives  a suf- 
ficient consideration,  without  taxing  the  capital, 
which  it  does  not  protect.  Under  our  laws,  can 
we  tax  the  wealth  thus  invested  in  slave  proper- 
ty ? They  ignore,  on  the  contrary,  the  very  ex- 
istence of  such  property ; therefore,  there  is  no 
room  for  the  fiction,  and  only  according  to  which 
the  situs  is  supposed  to  be  here.  But  if  we  could 
make  room  for  that  fiction,  it  still  remains  to  be 
shown  that  some  rule  of  reason  or  principle  of 
equity  can  be  urged  in  favor  of  such  taxation.” 

“We  may  reverse  the  illustration:  A citizen 
and  resident  of  Massachusetts  may  own  a farm 
in  one  of  the  counties  of  this  State,  and  large 
wealth  belonging  to  him  may  be  invested  in  cat- 
tle, in  sheep,  or  horses  which  graze  the  fields,  and 
are  visible  to  the  eyes  of  the  taxing  power. 
Now  these  goods  and  chattels  have  an  actual 
situs  as  distinctly  as  the  farm  itself.  Putting 
the  inquiry,  therefore,  with  reference  to  both, 
‘Are  they  real  estate  and  personal  estate,’  so  as 
to  be  subject  to  taxation  under  that  definition? 
It  seems  to  me  but  one  answer  can  be  given  to 
this  question,  and  that  answer  must  be  according 
to  the  actual  truth  of  the  case.  If  we  take  the 
fiction  instead  of  the  truth,  then  the  situs  of  these 
chattels  is  in  Massachusetts,  and  they  are  not 
within  this  State.  The  statute  means  one  thing 
or  the  other.  It  can  not  have  double  or  incon- 
sistent interpretations  ; and  as  this  is  impossible, 
so  we  can  not,  under  and  according  to  the  stat- 
ute, tax  the  citizen  of  Massachusetts  with  respect 
to  his  chattels  here,  and  at  the  same  time  tax  the 
citizen  of  New  York  in  respect  to  his  chattels 
having  an  actual  situs  there.  In  both  cases  the 


* The  decision  from  which  this  extract  is  derived 
was  delivered  in  June,  1861. 


71 

property  must  be  within  this  State,  or  there  is  no 
right  to  tax  it  at  all.” 

Sovereignty  over  the  Situs  of  Property. — “ Ev- 
ery nation  possesses  and  exercises  exclusive  sov- 
ereignty and  jurisdiction  throughout  the  full  ex- 
tent of  its  territory.  It  follows  from  this  prin- 
ciple that  the  laws  of  every  State  control,  of 
right,  all  the  real  and  personal  property  within 
its  territory.  The  second  general  principle  is, 
that  no  State  can,  by  its  laws,  directly  affect, 
bind,  or  regulate  property  beyond  its  own  terri- 
tory. This  is  a consequence  of  the  first  general 
principle;  a different  system,  which  would  rec- 
ognize in  each  State  the  power  of  regulating  per- 
sons or  things  beyond  its  territory,  would  exclude 
the  equality  of  rights  among  different  States,  and 
the  exclusive  sovereignty  wrhich  belongs  to  each 
of  them.” — Wheatons  International  Law , ch. 
2,  § 2 ; Foelix  Droit  International  Prive,  secs.  1) 
and  10. 

Capital  invested  without  the  State. — A resi- 
dent of  this  State  is  not  liable  to  be  assessed  and 
taxed  here  for  his  capital  invested  in  loans  in 
other  States,  upon  securities  taken  and  held  in 
those  States  by  his  agents.  Whether  the  owner 
of  property  thus  situated  is  liable  to  be  assessed 
for  it,  depends  upon  the  question  whether  it  can 
be  properly  and  legally  held  to  be  in  this  State 
at  the  time  of  the  assessment ; and  if  such  prop- 
erty has  no  actual  location  or  situs  within  this 
State,  notwithstanding  the  owner’s  residence  is 
here,  it  is  not  subject  to  taxation  in  the  State 
(23  N.Y.,  232  ; 21  Vt.,  152). 

Negotiable  bonds  owned  by  foreign  insurance 
companies  and  deposited  with  the  State  comp- 
troller have  a situs  in  this  State , and  are  deemed 
money  in  business,  within  the  meaning  of  the  act 
of  1855,  and  the  companies  are  properly  taxed  at 
the  place  where  they  have  their  principal  office 
or  place  of  business  within  this  State  (Court  of 
Appeals,  1864 ; British  Commercial  Life  Insur- 
ance Company  vs.  Commissioners  of  Taxes , 18 
Abb.  Pr.,  118,  and  31  N.  Y.,  32). 


c. 

OUTLINE  CODE  No.  1. 

An  Act  to  exempt  certain  personal  property  from 
assessment  and  taxation , and  to  change  the 
method  of  the  assessment  of  real  estate. 

The  People  of  the  State  of  New  York,  repre- 
sented in  Senate  and  Assembly,  do  enact  as  fol- 
lows : 

Section  1.  Be  it  enacted,  that  hereafter  the 
franchise,  capital  stock,  and  the  real  and  personal 
property  of  any  corporation  or  association,  organ- 
ized under  the  laws  of  this  State,  as  a trust  compa- 
ny, plank-road  company,  turnpike  company,  sav- 
ings bank,  gas  company,  ferry  company,  fire  or 
marine  insurance  company,  or  of  any  corporation 
authorized  to  receive  deposits  or  loan  money,  or 
discount  notes  or  bills,  or  of  any  bank  organized 
under  the  banking  act  of  this  State,  or  under  the 
national  banking  act,  and  located  in  this  State, 
and  the  shares  of  said  banks,  and  the  ownership 
of  said  shares,  and  all  foreign  insurance  companies 
doing  business  in  this  State,  and  the  capital  in 
business  and  property  of  said  foreign  insurance 


LOCAL  TAXATION. 


72 

companies  within  this  State,  shall  be  assessed 
and  taxed  according  to  the  existing  laws  of  this 
State,  and  according  to  such  laws  as  may  here- 
after be  enacted. 

§ 2.  Every  person  or  firm,  as  principal  or 
agent,  unincorporated  under  the  banking  act  of 
this  State  or  under  the  national  banking  act,  do- 
ing a banking  business  within  this  State,  receiving 
deposits,  and  paying  drafts  or  checks  at  sight, 
and  buying  or  discounting  notes  or  bills,  shall  be 
subject  to  assessment  and  taxation  in  the  town 
or  ward  where  the  business  is  conducted,  on  the 
amount  of  capital  employed,  but  not  for  a sum 
less  than  one-fourth  the  average  amount  of  de- 
posits during  the  previous  year,  subject  to  sight 
drafts  or  checks  upon  the  owners  or  managers 
of  said  banking  business. 

§ 3.  No  personal  property,  after  the  passage 
of  this  act,  except  personal  property  designated 
in  the  first  and  second  sections  of  this  act,  shall 
be  subject  to  assessment  and  taxation  in  this 
State. 

§ 4.  All  real  estate,  other  than  real  estate  de- 
scribed in  section  one  of  this  act,  subject  to  as- 
sessment and  taxation  according  to  the  present 
laws  of  this  State,  shall  hereafter  be  assessed  as 
follows  : All  lands  shall  be  assessed  exclusive  of 
buildings,  and  entered  in  the  third  column  of  the 
books  of  the  assessors,  at  one-half  of  their  just 
value ; and  all  buildings  on  said  lands  shall  be 
assessed  at  their  full  just  value,  and  entered  in 
the  books  of  the  assessors  also,  in  the  third  col- 
umn, for  the  purpose  of  taxation. 

§ 5.  The  provisions  of  any  law  of  this  State 
inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed. 


OUTLINE  CODE  No.  2 : ANOTHER  PLAN 
OR  SYSTEM. 

An  Act  to  exempt  from  assessment  and  taxation , 
under  laws  heretofore  enacted , personal  proper- 
ty, except  the  personal  property  of  certain  cor- 
porations and  the  capital  or  deposits  of  unin- 
corporated hankers , and  to  assess  the  persons , 
associations,  or  corporations  whose  personal  prop- 
erty is  thus  exempt , as  occupiers  of  buildings , 
for  personal  assessment  and  taxation  ; and  to 
equalize  taxation , and  to  limit  the  maximum 
rate  of  taxation. 

The  People  of  the  State  of  New  York,  repre- 
sented in  Senate  and  Assembly,  do  enact  as  fol- 
lows : 

Section  1.  The  shares  in  banks  organized  un- 
der the  laws  of  this  State  or  of  the  United  States, 
and  individual  bankers  doing  banking  business 
under  the  laws  of  this  State,  and  the  privileges 
and  franchises  of  savings  banks,  shall  be  assessed 
and  taxed  according  to  chapter  761  of  Laws  of 
1866. 

§ 2.  The  privileges  and  franchises  of  every  gas 
company,  turnpike  company,  plank-road  compa- 
ny, bridge  company,  ferry  company,  and  the  sur- 
plus profits  or  reserved  funds  of  such  company,  ex- 
ceeding ten  per  cent,  of  its  capital,  shall  be  assess- 
ed on  the  full  valuation  of  the  capital  of  the  cor- 
poration, after  deducting  the  assessed  value  of  its 
real  estate,  and  shall  be  taxed  in  the  same  man- 
ner as  other  personal  and  real  estate. 


§ 3.  The  shareholders  of  all  trust  companies, 
fire  and  marine  insurance  companies,  and  the 
shareholders  of  any  corporation  (other  than 
State,  national,  or  savings  banks),  authorized  to 
engage  in  the  business  of  loaning  money  and  dis- 
counting paper  or  receiving  deposits,  and  organ- 
ized under  the  laws  of  this  State,  shall  be  assess- 
ed and  taxed  on  the  full  value  of  their  shares 
therein  ; said  shares  shall  be  included  in  the  val- 
uation of  the  personal  property  of  such  stockhold- 
ers, in  the  assessment  of  taxes,  at  the  place,  town, 
or  ward  where  the  principal  office  of  the  corpo- 
ration is  located.  And  in  making  such  assessment 
there  shall  be  deducted  from  the  value  of  such 
shares  such  sum  as  is  the  same  proportion  to  such 
value  as  is  the  assessed  value  of  the  real  estate 
of  the  corporation,  and  in  which  any  portion  of 
the  capital  is  invested,  to  the  whole  amount  of 
the  capital  of  said  corporation,  and  provided  fur- 
ther that  nothing  herein  contained  shall  be  held 
or  construed  to  exempt  from  taxation  the  real 
estate  held  or  owned  by  any  such  company  or 
corporation ; but  the  same  shall  be  subject  to 
State,  county,  municipal,  and  other  taxation  to 
the  same  extent  and  rate  as  other  real  estate  is 
taxed. 

§ 4.  The  president,  secretary,  and  other  officers 
of  companies  designated  in  section  three,  shall 
cause  to  be  kept  a correct  list  of  the  names  of  the 
stockholders  and  the  number  of  shares  held  by 
each,  and  such  list  shall  be  open  to  the  inspec- 
tion of  the  officers  authorized  to  assess  or  collect 
any  tax  from  the  corporation  or  the  shareholders 
thereof.  The  assessment  of  the  shareholders  of 
said  corporation  shall  be  on  and  in  consideration 
of  the  privileges  and  franchises  granted  by  the 
Legislature,  and  all  taxes  levied  in  pursuance  of 
such  assessment  against  the  shareholders  shall  be 
paid  by  the  officers  of  the  corporation,  and  may 
be  collected  in  the  same  manner  as  other  taxes 
against  said  corporation. 

§ 5.  Every  person  or  firm,  as  principal  or 
agent,  unincorporated  under  the  banking  act  of 
this  State,  or  under  the  national  banking  act,  do- 
ing a banking  business  within  this  State,  receiv- 
ing deposits  and  paying  drafts  or  checks  at  sight, 
shall  be  subject  to  assessment  and  taxation,  in 
the  town  or  ward  where  the  business  is  conduct- 
ed, on  the  amount  of  capital  invested,  but  not  for 
a less  sum  than  one-fourth  the  average  amount 
of  deposits  during  the  previous  year,  subject  to 
sight  drafts  or  checks  upon  the  owners  or  man- 
agers of  said  banking  business. 

§ 6.  No  personal  property,  after  the  passage  of 
this  act,  except  personal  property  owned  by  the 
corporations  and  associations  named  in  the  first, 
second,  third,  and  fourth  sections  of  this  act,  and 
the  personal  property  designated  in  the  fifth  sec- 
tion of  this  act,  shall  be  subject  to  assessment  for 
the  purpose  of  taxation  in  this  State,  except  in 
the  following  manner : 

§ 7.  Every  person,  corporation,  or  firm  (other 
than  the  corporations,  associations,  and  persons 
or  firms  subject  to  taxation  according  to  sections 
one,  two,  three,  four,  and  five  of  this  act),  occu- 
pants as  owners  or  as  tenants,  and  not  as  lodgers 
or  boarders,  of  any  building  or  part  of  building 
subject  to  taxation  as  real  estate,  according  to 
the  laws  of  this  State,  shall  be  assessed  as  occu- 
piers, on  the  first  Monday  in  September,  in  each 
year,  in  the  city  of  New  York,  and  on  the  first 
Monday  in  June  in  the  other  portions  of  the 


\ 


APPENDIX. 


73 


State,  for  the  purpose  of  taxation,  in  the  town 
or  ward  where  the  building  may  be  situate,  a 
suik  equal  to  three  times  the  appraised  fair  and 
jus\  rent  or  annual  rental  value  thereof ; and  the 
sum  thus  assessed  shall  be  placed  in  the  fourth 
colutnn  of  the  books  of  the  assessors,  and  shall 
be  aided  up  with  the  personal  valuations  for  the 
purposes  of  taxation.  In  estimating  the  annual 
rent  of  any  building  or  part  of  a building,  the 
actu^  and  bona  fide  rent  thereof,  if  the  said  rent 
be  a hir  and  equitable  one  and  proportionate  to 
the  vfliie  of  the  property,  shall  be  the  basis  of  the 
assessment,  but  if  otherwise,  then  the  assessment 
may  bj  made  on  the  basis  of  the  interest  of  the 
actual  Value  of  the  building  occupied ; and  where 
the  ocqipier  is  the  owner  of  the  property,  the 
assessois  shall  estimate  the  annual  rent  of  the 
buildingor  part  of  a building  at  a sum  which  it 
would  b6  worth  annually,  or  ought  to  obtain,  on 
an  occupVncy  of  five  years,  or  on  the  basis  of  the 
interest  o\  the  actual  value  of  said  building,  and 
the  building  shall  be  deemed  to  include  the  land 
on  which \the  building  is  constructed,  and  so 
much  of  the  unbuilt  portion  of  the  lot  as  is  usu- 
ally used  aid  occupied  for  convenient  access  to 
and  occupancy  of  the  building,  but  not  to  exceed 
one  acre  of  land  adjacent  or  contiguous  to  one 
building.  \ , 

§ 8.  The  assessors  shall  place  in  the  first  column 
of  the  assessment-roll  the  names  of  the  taxable 
occupiers,  the!  number  of  the  building,  or  the 
numbers  of  tlte  room  or  rooms  occupied,  and 
the  purpose  foie  which  the  premises  are  used,  if 
known,  or  reported  by  the  occupant ; or  they 
may  give  any  other  description  of  the  building, 
or  of  the  occupants,  that  they  may  consider  will 
promote  the  due  execution  of  this  Iuav.  A sepa- 
rate assessment  shall  be  made  against  the  per- 
son, persons,  or  firms  occupying  each  building, 
or  any  part  thereof 

§ 9.  No  person  thall  be  assessed  as  an  occu- 
pant of  a building,  or  part  of  a building,  unless 
he  shall  own  property,  or  unless  he  has  in  his 
possession  and  undet  his  control  property,  as  an 
occupier  of  a building,  or  part  of  a building,  sub- 
ject to  execution,  according  to  the  laws  of  this 
State.  Nor  shall  any  person  be  deemed  to  be  an 
occupier  of  a building,  or  part  of  a building,  who 
is  employed  as  a servant  to  guard  a vacant  or  un- 
occupied house  or  building  not  containing  furni- 
ture, merchandise,  goods,  or  chattels,  except  such 
as  may  be  necessary  for  his  immediate  wants  as 
an  employe. 

§ 10.  All  the  laws  of  this  State  for  the  enforce- 
ment and  collection  of  any  personal  tax  shall  be 
applicable  in  the  enforcement  and  collection  of 
any  tax  assessed  under  this  act  against  any  per- 
son as  the  occupier  of  a building  or  part  of  a 
building ; and  the  amount  assessed  to  an  occu- 
pier, according  to  this  act,  shall  be  deemed  to  be 
a personal  assessment  or  valuation,  and  shall  here- 
after be  included  in  the  personal  valuation  in  the 
levy  of  all  taxes  upon  real  and  personal  prop- 
erty. 

§ 11.  In  the  cities  of  this  State,  the  owner  or 
owners  of  buildings  known  as  teuement-houses, 
rented  in  apartments  to  several  families  at  less 
than  one  hundred  and  fifty  dollars  per  annum  for 
each  suite  of  apartments,  shall  be  deemed  the  oc- 
cupier or  occupiers  thereof. 

§ 12.  In  assessing  the  personal  valuation  on  the 
basis  of  rental  value  of  buildings,  all  piers,  docks, 


wharves,  bridges,  and  all  railway  structures,  ex- 
cavations, tracks,  sidings,  turnouts,  bridges,  tun- 
nels, and  embankments,  now  subject  to.  taxation 
as  real  estate,  shall  be  deemed,  for  the  purposes 
of  this  act,  to  be  buildings,  and  the  occupiers 
thereof,  as  owners  or  tenants,  shall  be  assessed 
according  to  the  provisions  of  this  act. 

§ 13.  Any  person  or  his  represen tative,  deem- 
ing himself  disproportionately  assessed  by  the 
undervaluation  of  the  property  of  other  persons, 
in  the  assessment  of  real  estate  or  in  the  personal 
assessment  on  the  basis  of  annual  rental  value  of 
a building  or  part  of  a building,  may  appear  be- 
fore the  assessors  or  tax  commissioners  while  sit- 
ting as  a board  of  review,  and  may  introduce  the 
testimony  of  a competent  witness  or  expert,  and 
the  board  of  review  may  also  call  a competent 
witness,  and  an  oath  shall  be  administered  to  the 
two  witnesses  by  any  member  of  the  board  of  re- 
view, and  the  witnesses  shall  be  interrogated  as 
to  the  actual  value  of  the  real  estate  and  annual 
rental  value  of  buildings  for  which  the  person 
deeming  himself  aggrieved  has  been  assessed  on 
the  assessment-roll,  and  if,  after  an  examination 
of  the  roll  and  statement  of  facts,  opinions,  and 
views  by  the  witnesses,  it  shall  appear  to  the  sat- 
isfaction of  the  board  of  review  that  the  claimant 
has  been  disproportionately  assessed,  and  that 
some  or  all  the  values  on  the  assessment-rolls 
are  less  than  the  actual  values,  they  shall  raise 
the  real  estate  valuation  or  the  personal  assess- 
ment on  the  basis  of  the  rental  valuation,  or  both, 
of  all  persons  on  the  assessment-roll  to  the  full, 
fair,  and  just  valuation,  and  thus  give  relief  to  the 
aggrieved  party  by  a full,  equal,  and  proportional 
valuation.  The  examination  taken  under  this 
section  shall  be  in  writing,  and  shall  be  subscribed 
by  the  persons  examined,  and,  with  the  decision 
thereon  of  the  assessors  or  tax  commissioners, 
shall  be  filed  in  the  office  of  the  clerk  of  the 
town  or  city  in  which  such  assessment  shall  be 
made ; and  any  person  who  shall  willfully  swear 
falsely  on  such  examination  before  the  assessors 
or  tax  commissioners  shall  be  deemed  guilty  of 
willful  peijury. 

§ 14.  The  Board  of  Supervisors  in  no  county 
of  this  State  shall  assess  or  levy,  after  the  first 
day  of  December,  1871,  any  annual  tax,  unless 
authorized  by  a special  act  of  the  Legislature,  on 
the  property  and  valuation  in  any  town,  at  a 
higher  rate  than  one  per  cent,  on  the  amount  of 
real  and  personal  valuation ; nor  shall  the  board 
of  supervisors  of  any  county  assess  or  levy,  after 
the  first  day  of  December,  1871,  an  annual  tax 
upon  any  ward  or  city,  without  special  authority 
of  the  Legislature,  to  exceed  two  per  cent,  on 
the  real  and  personal  valuation  ; but  in  equaliz- 
ing the  valuation  after  December  1,  1871,  in  all 
the  towns  and  wards  in  the  county,  they  shall  in- 
crease the  aggregate  real  estate  valuation  and 
aggregate  personal  valuation  in  every  town  or 
ward  by  adding  such  sum  upon  the  hundred  to 
the  valuation  of  each  as  will  bring  the  valuation 
up  to  the  full  actual  valuation ; and  no  diminu- 
tion of  either  the  aggregate  real  or  personal  valu- 
ation in  any  town  or  ward  shall  be  made  unless 
the  aggregate  valuation  of  the  town  or  ward  shall 
exceed  the  full  actual  valuation,  and  they  shall 
in  no  instance  reduce  the  aggregate  Valuation  of 
all  the  towns  and  wards  below  the  aggregate  val- 
uation thereof,  as  made  by  the  assessors. 

§ 15.  This  act  shall  not  be  deemed  to  repeal 


74 


LOCAL  TAXATION. 


any  law  authorizing  the  levy  of  a tax  by  any 
town,  county,  or  city,  for  the  purpose  of  paying 
the  interest  or  principal  of  any  bonded  or  other 
debt  authorized  by  law ; and  there  shall  be  re- 
tained of  the  money  collected  according  to  the 
maximum  rate  of  taxation  established  by  the 
provisions  of  this  act,  by  the  officers  of  towns, 
counties,  and  cities,  a sum  sufficient  annually  to 
meet  the  annual  maturing  bonded  obligations  of 
the  town,  county,  or  city. 

§ 16.  The  State  Board  of  Equalization,  in  all 
equalizations  made  after  the  1st  of  December, 
1871,  shall  equalize  both  the  real  and  personal 
valuations  in  the  counties  of  this  State,  by  add- 
ing to  the  aggregate  valuation  of  real  and  per- 
sonal valuations  in  each  county  such  sum  on  the 
hundred  as  will  bring  the  aggregate  real  and  ag- 


gregate personal  valuation  up  to  the  full  actual 
valuation,  and  thus  equalize  by  a full  valuation 
in  every  county ; and  no  deduction  shall  be  m&de 
in  either  the  real  or  personal  valuation  of  any 
county,  unless  the  valuation  shall  exceed  the  act- 
ual full  valuation ; but  they  shall  in  no  instance 
reduce  the  aggregate  personal  or  real  valuation 
of  all  the  counties  below  the  valuations  thereof, 
as  returned  by  the  boards  of  supervisors  to  the 
Comptrollers  office. 

§ 17.  Heal  estate  shall  continue  to  be  assessed 
and  taxed  according  to  existing  laws,  except  as 
said  laws  may  be  repealed  or  modified  by  the 
provisions  of  this  act. 

§ 18.  The  provisions  of  any  law  of  this  State 
inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed. 


Franklin  Square,  New  York,  March , 1871. 


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BARNES’S  NOTES. 

Notes  on  the  New  Testament.  By  Albert 

Barnes.  New  Edition,  Revised  and  greatly 

Improved. 

NOTES  ON  THE  GOSPELS.  With  Maps 
and  Illustrations.  2 vols.,  12mo,  Cloth, 
$3  00.  ( Ready .) 

NOTES  ON  THE  ACTS.  With  Map  and 
Illustrations.  12mo,  Cloth,  $1  50.  {Ready.) 

NOTES  ON  THE  ROMANS.  {In  Press.) 

The  remaining  volumes  are  in  preparation. 

Among  the  last  labors  of  the  late  Rev.  Albert  Barnes, 
accomplished  with  very  great  difficulty,  owing  to  his 
almost  complete  loss  of  sight,  was  the  careful  and 
thorough  revision  of  his  popular  Notes  on  the  New 
Testament.  It  seemed  eminently  desirable,  both 
to  author  and  publishers,  that  these  Notes  should 
be  made  more  valuable  by  incorporating  in  them  the 
vast  amount  of  light  which  science  and  discovery  has 
in  the  last  twenty  years  thrown  upon  Scripture.  In 
the  new  edition  much  has  been  added  in  the  way  of 
notes,  and  many  valuable  and  interesting  illustrations 
have  been  inserted.  At  the  time  of  the  author’s  death 
all  the  volumes  were  ready  for  the  press : the  Gospels, 
in  two  volumes,  is  just  ready,  and  the  Acts,  in  one 
volume,  will  be  published  shortly.  The  volume  on 
Romans  is  stereotyped,  and  will  soon  be  issued.  The 
other  volumes  will  appear  at  suitable  intervals. 

The  success  which  has  attended  these  Notes  encour- 
ages the  hope  that  the  new  edition,  made  so  much 
more  valuable,  will  be  eagerly  welcomed  by  all  stu- 
dents of  Scripture. 


THE  CRYPTOGRAM.  A Novel.  By  James 
De  Mille,  Author  of  “The  Dodge  Club,” 
“ Cord  and  Creese,”  “ The  American  Baron,” 
&c.  8vo,  Paper,  $1  50 ; Cloth,  $2  00. 


FAIR  FRANCE:  Impressions  of  a Traveler. 
By  the  Author  of  “ John  Halifax,  Gentleman,  ” 
‘ ‘ A Brave  Lady,  ” * ‘ Olive,  ” &c.  1 2mo,  Cloth, 
$1  50. 

This  is  a truly  fascinating  volume.  The  book  has 
nothing  to  do  with  the  present  crisis.  It  is  La  Belle 
France — Paris,  with  its  quiet  churches  and  its  gay  car- 
nival crowds,  and  old  provincial  cities  like  Caen  and 
Chartres— that  is  here  described  as  it  was  before  the 
black  waves  of  invasion  rolled  over  the  land.  Years 
must  pass  before  it  will  be  possible  for  any  to  see 
Fair  France  as  our  author  was  privileged  to  see  her ; 
and  this  lends  a special  interest  to  the  pictures  here 
presented  to  us.  There  is  much  that  is  very  beautiful 
and  charming  in  these  recollections.  This  it  is  hard- 
ly necessary  to  say  to  any  who  know  and  can  appre- 
ciate the  Author  of  “John  Halifax.”— Echo  (London). 

This  volume  will  be  found  pleasant  reading. — Athe- 
naeum (London). 


RAWLINSON’S  MANUAL  OF  ANCIENT 
HISTORY.  A Manual  of  Ancient  History, 
from  the  Earliest  Times  to  the  Fall  of  the 
Western  Empire.  Comprising  the  History  of 
Chaldsea,  Assyria,  Media,  Babylonia,  Lydia, 
Phoenicia,  Syria,  Judsea,  Egypt,  Carthage,  Per- 
sia, Greece,  Macedonia,  Parthia,  and  Rome. 
By  George  Rawlinson,  M.A.,  Camden  Pro- 
fessor of  Ancient  History  in  the  University  of 
Oxford.  12mo,  Cloth,  $2  50. 

Few  men  are  better  fitted  for  such  a task  than  Pro- 
fessor Rawlinson,  and  we  find  in  this  volume  ample 
evidence  that  he  has  completed  the  undertaking  in  a 
very  admirable  way.  He  has  ranged  his  authorities, 
given  the  result  of  modern  investigations,  and  gener- 
ally brought  the  Manual  up  to  the  present  date  in  a 
minute,  concise,  and  accurate  manner,  which  renders 
the  volume  a handy  and  excellent  work  of  reference. 
— Examiner  (London). 

As  an  analysis,  it  is  excellent.  The  reader  of  Grote 
and  Mommsen  will  do  well  to  refresh  his  memory  and 
systematize  his  knowledge  by  the  perusal  and  re- 
erusal  of  Professor  Rawlinson’s  concise  yet  intelligi- 
le  summary.  Students  of  ancient  history  owe  him 
thanks  for  the  time  and  trouble  which  he  has  bestowed 
upon  the  book.— Athenaeum  (London). 

Will  be  found  a most  useful  book  of  reference.  In 
respect  to  convenience  of  arrangement,  clearness  of 
statement,  and  general  accuracy,  it  leaves  nothing  to 
be  desired,  and  certainly  has  no  rival  in  the  field  that 
it  covers.  We  have  found  it  especially  satisfactory  in 
the  summaries  that  it  gives  of  important  groups  of  se- 
ries of  events,  without  entering  into  unimportant  de- 
tail ; such,  for  instance,  as  the  legislation  of  Solon 
and  the  Gracchi,  and  the  events  of  the  Peloponnesian 
War.  Iii  Oriental  history,  Mr.  Rawlinson  is  himself 
an  authority,  and  this  outline  will  possess  a peculiar 
value. — Nation. 


SIR  HARRY  HOTSPUR  OF  HUMBLE- 
TH WAITE.  A Novel.  By  Anthony  Trol- 
lope, Author  of  “The  Vicar  of  Bullhamp- 
ton,”  “ He  Knew  He  was  Right,”  “The  Ward- 
en” and  “Barchester  Towers,”  &c.  Illus- 
trated. 8vo,  Paper,  50  cents. 

In.  this  novel  we  are  glad  to  recognize  a return  to 
Mr.  Trollope’s  old  form.  The  characters  are  drawn 
with  vigor  and  boldness,  and  the  book  may  do  good 
to  many  readers  of  both  sexes. — London  Times. 

This  brilliant  novelette  appears  to  us  decidedly 
more  successful  than  any  other  of  Mr.  Trollope’s  short- 
er stories.  No  reader  who  begins  to  read  the  book 
will  lay  it  down  until  the  last  page  is  turned. — Athe- 
naeum (London). 

One  of  Mr.  Trollope’s  very  best  tales.  — Spectator 
(London). 

A novel  of  remarkable  power— better  in  many  ways 
than  some  of  Mr.  Trollope’s  longer  works.— Examiner 
(Loudon). 


2 


Harper  &*  Brothers'  List  of  New  Books. 


LIGHT  AT  EVENING  TIME : a Book  of 
Support  and  Comfort  for  the  Aged.  Edited 
by  John  Stanford  Holme,  D.D.  Ele- 
gantly printed  from  large  type  on  toned  pa- 
per. 4to,  Cloth,  $2  50. 

A handsome,  generous-paged  book,  which  the  Har- 
pers must  have  devised  for  the  special  purpose  of 
drawing  down  on  their  heads  the  hearty  blessing  of 
all  aged  people  who  read  its  kindly  type  and  appreci- 
ate its  thoughtful,  tender  afternoon  contents.  The 
best  words  of  Howe,  Wesley,  Robertson,  Spurgeon, 
Jeremy  Taylor,  Dr.  Arnold,  Krummacher,  and  many 
other  sages  and  saints  give  a varied  richness  to  this 
book  which  ought  to  find  its  way,  by  tilial  care,  to 
many  thousand  elderly  persons  who  will  surely  dis- 
cover in  it  the  purest  and  most  cheering  light  at  their 
evening  time. — Cincinnati  Chronicle. 

An  admirable  selection  from  the  writings  of  eminent 
authors,  which  are  calculated  to  give  comfort  and  con- 
solation, because  giving  hope,  to  the  aged.  It  is  very 
carefully  and  skillfully  edited. — World  (N.  Y.). 

The  scheme  of  the  volume  is  certainly  excellent. 
The  selections  have  been  made  from  a wide  range  of 
authors,  going  back  to  St.  Augustine  and  Chrysostom, 
and  including  representative  English  and  American 
divines,  both  of  the  seventeenth  and  nineteenth  cen- 
turies. There  is  a singular  variety  of  topics,  consid- 
ering the  purpose  of  the  work.  Withal,  the  book  is 
printed  in  a full,  clear,  and  sizable  type,  and  on  paper 
which  assists  the  eye. — Christian  Union. 

From  the  Rev.  Henry  Ward  Beecher. 

I have  looked  through  your  new  book  for  the  aged, 
“Light  at  Evening  Time,”  and  congratulate  you  on 
the  successful  execution  of  an  idea  which  was  very 
excellent. 

I have  no  doubt  that  it  will  carry  cheer  to  many  a 
soul  that  is  now  walking  near  to  the  setting  sun. 

From  the  Rev.  John  Hat.t.,  D.D.,  Pastor  of  Fifth  Avenue 
Presbyterian  Churchy  New  York. 

When  the  idea  of  the  book  was  suggested  to  me,  I 
thought  it  so  good  that  it  gave  me  pleasure  to  co-op- 
erate in  carrying  it  out.  I considered  the  undertaking 
in  good  hands  as  to  editing  and  publishing,  and  I now 
add  with  pleasure  that  inspection  of  the  proof-sheets 
comfirms  my  original  impression. 

From  the  Rev.  Howard  Crosby,  D.  D. , LL.  D. , Chancellor 
of  the  University  of  New  York. 

Dr.  Holme’s  book,  “ Light  at  Evening  Time,”  is  well 
adapted  to  the  comfort  of  the  aged ; and  there  is  much 
in  it  which  would  be  wholesome  and  palatable  for  the 
young  too.  I approve  of  the  idea,  and  the  way  in 
which  Dr.  Holme  has  realized  it.  The  publishers  have 
given  it  an  attractive  and  appropriate  dress. 

From  the  Rev.  Stephen  H.  Tyng,  D.D.,  Rector  of  St. 

George's , New  York. 

Your  interesting  and  valuable  compilation  presents 
to  me  real  attractions.  I think  it  must  be  useful  and 
honored  by  the  Master.  You  will  find  it  welcomed 
as  popular,  and  valued  as  practical  and  excellent. 


BRED  IN  THE  BONE;  or,  Like  Father, 
Like  Son.  A Novel.  By  the  Author  of  “ A 
Beggar  on  Horseback,”  “ Gwendoline’s  Har- 
vest,” “Won  — Not  Wooed,”  “Carlyon’s 
Year,”  &c.  With  Illustrations.  8vo,  Paper, 
50  cents. 


TODD’S  APPLE  CULTURIST.  The  Apple 
Culturist.  A Complete  Treatise  for  the  Prac- 
tical Pomologist.  To  Aid  in  Propagating  the 
Apple,  and  Cultivating  and  Managing  Orch- 
ards. Illustrated  with  Engravings  of  Fruit, 
Young  and  Old  Trees,  and  Mechanical  Devices 
employed  in  Connection  with  Orchards  and  the 
Management  of  Apples.  By  Sereno  Ed- 
wards Todd,  Author  of  “Young  Farmer’s 
Manual,”  &c.  12mo,  Cloth,  $1  50. 

EARL’S  DENE.  A Novel.  By  R.  E.  Fran- 
cillon.  8 vo,  Paper,  50  cents. 


OUR  GIRLS.  By  Dio  Lewis,  A.M.,  M.D. 

12mo,  Cloth,  $1  50. 

A very  interesting  book  by  one  of  our  most  popular 
authors,  full  of  useful  suggestions  and  valuable  in- 
formation on  hygiene,  calisthenics,  and  physical  edu- 
cation. 

Dr.  Lewis  is  well  known  as  an  acute  observer,  a 
man  of  great  practical  sagacity  in  sanitary  reform,  and 
a lively  and  brilliant  writer  upon  medical  subjects.— 
N.  Y.  Observer. 


BEECHER’S  MORNING  AND  EVENING 
EXERCISES.  Morning  and  Evening  Devo- 
tional Exercises  : selected  from  the  Publish- 
ed and  Unpublished  Writings  of  the  Rev. 
Henry  Ward  Beecher.  Edited  by  Lyman 
Abrott.  Crown  8vo,  Cloth,  $2  00. 

These  selections  from  Mr.  Beecher’s  writings  are  ar- 
ranged for  morning  and  evening  devotional  readings. 
They  are  headed  by  an  appropriate  text  of  Scripture, 
and  a few  verses  from  familiar  hymns  or  well-known 
sacred  poems  are  sometimes  added.  There  is  a read- 
ing for  the  morning  and  evening  of  each  day  of  the 
year,  and  the  fitting  thoughts  for  each  season  are  al- 
ways suggested.  Like  all  Mr.  Beecher’s  teachings, 
these  are  simple,  earnest,  and  practical,  with  little  of 
doctrine  in  them,  but  much  that  bears  on  everyday 
life.  Their  aim  is  to  bring  comfort  and  strength  amid 
the  warfare  and  struggles  of  the  world,  to  elevate  the 
mind,  and  animate  the  heart  with  high,  noble,  and  holy 
thoughts.  To  those  who  would  snatch  a few  minutes 
before  the  day’s  work  begins  for  serious  thought,  and 
would  end  it  with  reflection,  this  volume  can  be  warm- 
ly recommended. — N.  Y.  Times. 

The  wonderful  fertility  of  the  man  is  every  where 
apparent,  and  the  abundance  and  excellence  of  his  il- 
lustrations are  marvelous. — Presbyterian. 

A new  and  pleasant  method  of  giving  a Beecher 
miscellany  of  devotional  matter,  arranged  under  texts 
of  Scripture,  for  a morning  and  evening  reading  each 
day  of  the  year,  with  an  appropriate  stanza  of  poetry 
frequently  added. — Advance. 

As  the  title  indicates,  the  book  is  a collection  of  ex- 
tracts from  Mr.  Beecher’s  published  and  unpublished 
utterances,  with  snatches  of  familiar  hymns  here  and 
there,  the  whole  adapted  to  the  purposes  of  private 
devotion,  and  arranged  in  a convenient  way  for  the 
morning  and  evening  of  each  day  of  the  year.  No 
person  can  make  this  his  daily  hand-book  without  de- 
riving therefrom  rich  spiritual  instruction  and  aid. — 
Congregationalist. 

Spiritual,  devout,  and  eminently  practical;  and  intel- 
lectually fully  up  to  the  highest  standard  of  excellence. 
As  “helps"  to  home  worship  they  will  be  found  of 
great  service,  and  those  who  read  them  regularly  will 
be  the  wiser  and  better  for  it. — Albany  Evening  Jour- 
nal. 

Who  can  read  his  words,  morning  and  evening  for 
a year,-  without  deriving  from  them  unspeakable  en- 
couragement and  comfort  ? There  is  little  doctrinal, 
nothing  sectarian,  in  the  book,  but  it  is  full  of  the  best 
Christianity.— A.  Y.  Evening  Mail. 

We.  know  of  no  book  of  a similar  character  which  is 
more  likely  to  hold  the  attention  of  its  readers  to  the 
professed  purpose  for  which  it  is  used.— Worcester 
Spy. 


FROM  THISTLES  — GRAPES  ? A Novel. 
By  Mrs.  Eiloart,  Author  of  ‘ ‘ The  Curate’s 
Discipline,”  &c.  8vo,  Paper,  50  cents. 

As  a story  it  is  very  fascinating,  with  good  and  bad, 
joy  and  sorrow  blended  in  very  natural  proportions. 
— A Ibany  Evening  Journal. 

Written  in  an  unusually  straightforward  and  lucid 
style,  possessing  a well- constructed  plot,  brisk  in 
movement,  and  entertaining  in  dialogue. — Citizen  and 
Round  Table. 

Shows  considerable  knowledge  of  individual  char- 
acter.— Athenaeum  (London). 

* * * Showing  both  talent  and  culture. — N.  Y.  Her- 
ald. 

The  charm  of  Mrs.  Eiloart’s  works  lies  in  the  con- 
sistent individuality  of  her  characters.—  Examiner  and 
London  Review. 


Harper  Brothers'  List  of  New  Books. 


3 


ADVENTURES  OF  A YOUNG  NATU- 
RALIST. By  Lucien  Biart.  Edited  and 
adapted  by  Barker  Gillmore.  With  117 
Illustrations.  12mo,  Cloth,  $1  75. 

It  would  be  hard  to  find  a book  more  attractive  to 
a boy  than  this,  none  which  imparts  more  endurable 
information  on  all  subjects  connected  with  natural 
history.  It  describes  the  adventures  of  a boy  of  ten, 
who  accompanies  his  father,  a naturalist,  making  a col- 
lection, a savant,  his  friend,  and  an  Indian  guide,  who 
journey  through  the  Cordilleras  of  Mexico.  The  scenes 
through  which  this  party  travel,  and  the  thrilling  inci- 
dents which  happen  to  them— their  meeting  with  wild 
animals,  the  discovery  and  examination  of  a wonderful 
cave,  a hurricane  which  nearly  sweeps  them  away,  a 
current  they  barely  escape  being  overwhelmed  by,  and 
a wild  adventure  in  the  woods— are  all  forcibly  and 
graphically  described.  The  names  and  habits  of  the 
different  animals,  the  varieties  and  classes  of  the 
various  trees  and  plants,  and  all  the  natural  phenom- 
ena of  the  region  traversed,  are  explained  in  a simple, 
clear,  and  pleasing  manner.  The  little  hero  is  forced 
to  endure  many  hardships,  to  suffer  from  hunger  and 
thirst,  from  fatigue  and  exposure,  but  he  goes  through 
all  courageously,  and  at  last  reaches  the  end  of  his 
journey  in  safety.  The  work  is  profusely  illustrated. 
— .V.  Y.  Times. 

The  story  is  graphically  told,  with  a spirit  that  nev- 
er flags  from  the  first  page,  and  there  are  not  many 
juvenile  novels  which  will  be  read  with  more  sustain- 
ed interest.  The  book  is  a course  of  natural  history, 
and  young  people  who  would  turn  with  weariness 
from  the  formal  study  of  the  subject  will  be  surprised 
into  the  acquisition  of  a great  deal  of  useful  knowl- 
edge.— Brooklyn  Union. 

It  would  be  hard  to  decide  whether  this  book  excels 
in  interest  or  in  information.—  N.  Y.  Herald. 

There  has  hardly  been  a book  for  boys  since  “Rob- 
inson Crusoe"  that  has  been  so  fascinating  as  this  will 
prove.  It  is,  moreover,  crowded  with  spirited  illus- 
trations.— Philadelphia  Evening  Bulletin. 

The  pictures  are  full  of  animation,  and  there  are 
many  vivid  and  highly  colored  descriptions  of  adven- 
ture. It  will  prove  a source  of  delight  to  hundreds  of 
boys. — Commercial  Advertiser. 

The  illustrations  are  alone  sufficient  to  make  the 
book  remarkable  for  interest,  being,  every  one,  fine  bits 
of  artistic  drawing  beautifully  engraved.  The  work 
is  full  of  them,  every  adventure,  every  animal,  and  ev- 
ery picturesque  scene  being  pictured  on  a full  page.— 
Boston  Post. 

The  author’s  style  throughout  is  graphic,  and  the 
book  is  as  attractive  as  pen  and  pencil  combined  can 
well  make  it. — Examiner  and  London  Review. 

Seldom  is  such  a brilliant  book  offered  to  young  peo- 
ple'. The  cuts  are  of  the  most  attractive  kind,  illustra- 
ting the  wildest  scenes  in  nature,  and  the  most  excit- 
ing situations  in  adveuture.  The  story  is  just  such  as 
boys  love.  A better  boy’s  book  could  hardly  be  named. 
— Sunday-School  Times. 

A grand,  good  book  for  boys  .—Utica  Herald. 

All  the  wonders  of  the  animal  creation,  from  the  lit- 
tle ground  mouse  to  the  ferocious  jaguar,  and  from 
the  tiniest  of  snakes  to  the  voracious  anaconda,  and 
of  birds,  from  the  humming-bird  to  the  king  of  the 
vultures,  are  unfolded  to  the  view  and  described  as 
among  the  objects  personally  observed  by  the  party. 
The  gorgeous  luxuriance,  too,  of  the  vegetation  in  those 
splendid  primeval  forests  presents  abundant  subjects 
for  wonder  and  delighted  examination.  Nearly  every 
scene  and  event  of  interest  which  occurred  to  the  ex- 
plorers is  made  the  subject  of  a spirited  picture,  the 
whole  furnishing  a rich  repast  to  the  young  and  curi- 
ous reader.— Interior. 


THE  VIVIAN  ROMANCE.  By  Mortimer 
Collins.  8vo,  Paper,  50  cents. 

Well  worth  the  perusal  of  the  novel-reading  public. 
— A thenceum  (London). 

This  novel  would  do  credit  to  Wilkie  Collins,  as  it  is 
exactly  in  his  vein,  and  has  a good  deal  of  his  man- 
ner.— Albany  Journal. 

Mr.  Collins  has  evidently  seen  a good  deal  of  the 
world,  both  of  books  and  men.  He  can  write  good 
Euglish,  and  many  of  his  reflections  are  wisely  and  wit- 
tily put.  He  is  largely  gifted  with  the  poetic  temper- 
ament ; his  descriptions  of  scenery  are  happily  given, 
and  there  is  a sprightliness  in  his  manner  of  telling 
his  story  which  makes  his  book  extremely  readable. 
— London  Times. 


DU  CHAILLU’S  APINGI  KINGDOM.  My 
Apingi  Kingdom : with  Life  in  the  Great  Sa- 
hara, and  Sketches  of  the  Chase  of  the  Os- 
trich, Hyena,  &c.  By  Paul  Du  Chaillu, 
Author  of  Du  Chaillu' s Books  of  Adventure. 
With  numerous  Illustrations.  12mo,  Cloth, 
$1  75. 

No  man  has  had  so  many  curious  adventures,  in  so 
many  out-of-the-way  places,  as  Paul  Du  Chaillu ; and 
no  one  has  ever  told  the  story  of  his  adventures  more 
charmingly. — Albany  Evening  Journal. 

Another  very  pleasant  book  from  the  pen  of  Mr.  Du 
Chaillu,  whose  African  adventures,  set  forth  in  such  a 
happy  narrative  style,  and  with  such  lively  and  pictur- 
esque effects,  are  always  so  attractive  for  the  young 
people. — N.  Y.  Times. 

* * * In  the  new  volume  he  again  takes  up  the  thread 
of  his  story  about  the  Apingi  Land,  a country  not  far 
from  the  equator,  on  the  south  side,  in  which  he  had 
the  good  or  ill  luck  to  be  made  a king  over  the  bar- 
barous people.  The  superstitious  natives  regarded 
him  as  a mighty  spirit — something  move  than  a great 
“ medicine  man  ’’  of  the  American  Indians — and  it  was 
his  aim  to  rule  over  them  with  a beneficent  authority. 
He  took  care  of  their  sick,  was  kind  to  their  children, 
saved  the  women  from  being  beaten,  and,  by  a suc- 
cession of  good  deeds,  won  their  respect  and  love. 
The  old  men  of  the  tribe  would  gather  round  their 
monarch,  and,  inspired  by  a plentiful  supply  of  palm 
wine,  would  till  his  ear  with  stories  of  the  ancient 
time,  of  which  several  legendary  tales  are  here  related. 
But  the  best  part  of  the  book  consists  of  the  narrative 
of  personal  incidents,  which  happened  to  the  writer  in 
great  abundance,  and  with  which  he  well  understands 
the  art  of  entertaining  his  youthful  audience. — A.  Y. 
Tribune. 

* * * Is  as  fascinating  as  its  predecessors.—  Independ- 
ent. 

Du  Chaillu  is  a most  agreeable  writer.  From  begin- 
ning to  end  his  book  is  a constant  succession  of  graphic 
pictures  of  life  in  Africa. — N.  Y.  Herald. 

The  young  folks  will  find  this  volume  a charming 
one.  It  is  written  in  the  author’s  peculiar  conversa- 
tional style,  which  is  so  popular  with  the  young.—  Bos- 
ton Traveler. 


DU  CHAILLU’S  BOOKS  OF  ADVENTURE 
FOR  BOYS.  Stories  of  the  Gorilla  Country. 
— Wild  Life  Under  the  Equator. — Lost  in  the 
Jungle. — My  Apingi  Kingdom.  4 vols.,  12mo, 
Cloth,  $1  75  each;  uniformly  bound,  in  box, 
$7  00. 


WHICH  IS  THE  HEROINE?  A Novel. 
8vo,  Paper,  50  cents. 

Although  the  story  of  quiet,  everyday  life  devoid  of 
thrilling  incident,  this  novel  yet  possesses  more  than 
ordinary  interest.  The  plot  is  clear,  and  is  not  marred 
by  any  straining  after  effect.  The  characters  are  fine- 
ly delineated,  the  dialogue  natural,  and  the  denoue- 
ment satisfactory. — Star  (N.  Y.). 

Interesting  and  well  written.— iV.  Y.  Herald. 

A book  of  pure  Raphaelistic  portraits.  — American 
and  Gazette  (Philadelphia). 


THE  TRAIL  OF  THE  WAR.  On  the  Trail 
of  the  German  and  French  War.  By  Alex- 
ander Innes  Shand,  Occasional  Correspond- 
ent of  “ The  London  Times.”  With  Illustra- 
tions. 8vo,  Paper,  35  cents. 

A lucid  and  graphic  narrative— a well- written  chap- 
ter of  history. — Philadelphia  Press. 

Well  timed  and  acceptable.  It  clears  up  very  much 
that  has  been  unintelligible  in  the  dispatches  and  com- 
munications from  abroad,  and  helps  to  a better  under- 
standing of  the  position  of  affairs  generally.— Star. 

Lively  and  entertaining,  and  well  worthy  of  being 
preserved  in  permanent  form.— Boston  Post. 

It  abounds  with  passages  of  vivid  description,  and, 
to  our  thinking,  it  depicts  more  forcibly  than  any  oth- 
er account  we  have  yet  read  the  misery  produced  by 
war,  even  in  districts  where  the  conflict  is  not  actually 
raging.— Graphic  (Loudon). 


4 


Harper  <5j°  Brothers'  List  of  New  Books . 


PUSS-CAT  MEW,  and  other  New  Fairy  Stories 
for  my  Children.  By  E.  H.  Knatchbull- 
Hugessen,  M.P.  Illustrated.  12mo,  Cloth, 
$1  25. 

Containing  twenty-one  original  stories,  in  which 
fairies  and  dwarfs,  ogres  and  speaking  animals,  figure 
as  extensively  as  juvenile  readers  possibly  can  desire, 
and  even  pieces  of  furniture  express  themselves  with 
fluency  and  effect— in  fact,  as  in  the  good  old  tales  of 
our  youth,  most  of  the  incidents  are  delightfully  im- 
probable.— Philadelphia  Press. 

The  stories  are  brief,  charmingly  told,  and,  although 
in  a field  which  has  been  thoroughly  explored,  are, 
withal,  full  of  piquant  originality.— Star  (N.  Y.). 

The  author  has  been  very  successful  in  his  fancies, 
and  they  will  bring  a world  of  pleasure  to  all  fairy- 
loving  people.  While  feeding  the  imagination  of  his 
youthful  readers,  he  at  the  same  time  strives  to  teach 
some  moral  truth,  but  in  a way  to  enhance  rather  than 
diminish  the  interest  of  the  story.  This  charming 
collection  will  assuredly  be  a great  favorite  among  the 
many  children  who  still  love  and  delight  in  the  fairies. 
— N.  Y.  Times. 

By  a favorite  English  writer,  who  possesses  the  rare 
gift  of  narrating  wonderful  stories  to  young  people  in 
a style  of  natural  and  familiar  conversation.— iV.  Y. 
Tribune. 

Readers  of  all  ages  like  a good  fairy  story,  and  these 
are  good.  They  are  laid  in  that  fascinating  border- 
land of  unreal  reality  which  lies  just  beyond  the  hard 
facts  of  our  everyday  life  and  the  remoter  land  of 
dreams,  to  which  we  are  all  more  or  less  fond  of  mak- 
ing occasional  excursions.  They  unite  both  sides,  the 
real  and  imaginary,  just  enough  to  make  a reader  stop 
now  and  then  to  ask  which  is  which.  And  the  teachings 
of  the  stories,  we  must  add,  are  all  on  the  side  of  what 
is  good  and  beautiful.— Independent. 

Nothing  happier  in  their  line  has  appeared  since  the 
inimitable  creations  of  Jean  Mace.—  Sunday-School 
Times. 

A collection  of  twenty-one  stories  such  as  children 
delight  to  listen  to  with  open  mouth  and  gleaming 
ey  e.—Congregationalist. 

The  author  is  an  admirable  “story-teller”  for  little 
audiences. — Cleveland  Herald. 

They  are  lively  and  fascinating;  hut  they  have  a 
meaning  also. — Albany  Argus. 

Stories  about  ogres  and  fairies,  and  adventurous 
hoys  and  girls,  written  in  a very  fascinating  manner, 
and  reminding  the  reader  most  agreeably  of  those  fa- 
vorites of  his  youth,  “Jack,  the  Giant-Killer,”  and  its 
kind.  The  volume  is  beautifully  printed  and  bound, 
and  contains  many  spirited  illustrations. — Literary 
World. 


ABBOTT’S  LOUIS  XIV.  History  of  Louis 
XIV.  By  John  S.  C.  Abbott,  Author  of 
“ The  History  of  Napoleon  Bonaparte,”  “ The 
‘ French  Revolution,”  &c.  With  Illustrations. 
lGmo,  Cloth,  $1  20.  ( Uniform  with  Abbotts ’ 
Illustrated  Histories.') 

The  narrative  is  one  of  deep  interest,  and  its  repro- 
duction in  this  compact  form  is  very  acceptable.— Chi- 
cago Evening  Post. 

This  little  volume  is  written  with  great  clearness, 
and  in  a highly  interesting  style. — A.  Y.  Times. 

The  biographical  histories  of  the  Messrs.  Abbott  are 
well  known,  and  on  the  whole  have  done  good  service. 
The  light  and  pleasant  style  in  which  they  are  written 
induce  many  to  read  them  who  have  neither  time  nor 
inclination  for  deeper  or  more  extensive  works.  The 
present  little  volume  is  among  the  most  graphic  bio- 
graphical sketches  they  have  given  to  the  public.— 
Toronto  Globe. 

IN  DUTY  BOUND.  A Novel.  By  the  Author 
of  “Mark  Warren,”  “A  Brave  Life,”  &c. 
Illustrated.  8vo,  Paper,  50  cents. 

The  author  of  this  charming  volume  is  recognized 
as  one  of  the  most  successful  writers,  and  the  present 
work  will  serve  to  enhance  his  reputation. — N.  Y.  Ex- 
press. 

The  story  contains  a great  many  dramatic  situations 
artistically  presented,  and  several  well-drawn  charac- 
ters, which  very  early  enlist  and  retain  the  sympathies 
of  the  reader  .—Albany  Evening  Journal. 


SHAKESPEARE’S  COMEDY  OF  THE 
MERCHANT  OF  VENICE.  Edited,  with 
Notes,  by  W.  J.  Rolfe,  formerly  Head  Mas- 
ter of  the  High  School,  Cambridge,  Mass. 
Engravings.  16mo,  Cloth,  90  cents. 

A book  equally  adapted  for  the  scholar  and  the  stu- 
dent. In  the  getting  up,  with  its  fine  print  and  beau- 
tiful engravings,  this  booklet  is  a bijou.— Philadelphia 
Press. 

A valuable  addition  to  our  school  apparatus  for  the 
critical  study  of  our  mother  tongue.  The  illustrations 
are  quite  numerous,  are  pertinent  to  the  text,  and  are 
of  much  more  than  average  excellence.— Independent. 

The  whole  work  is  that  of  a student  who  not  only 
appreciates  the  value  of  his  work,  but  who  understands 
the  art  of  showing  it  to  others.  The  work  is  thor- 
oughly done,  handsomely  brought  out,  and  is  to  be 
commended  to  Shakespearean  students,  as  well  as  to 
teachers  who  want  a good  class-book  in  English  liter- 
ature  Philadelphia  Post. 

Will  prove  not  only  useful  as  a school-book,  but,  if 
we  are  not  very  much  mistaken,  a favorite  as  well  in 
the  parlor. — Albion. 


A SIREN.  A Novel.  By  T.  Adolphus  Trol- 
lope, Author  of  “ Lindisfarn  Chase,”  &c. 
8vo,  Paper,  50  cents. 

An  exceptionally  good  novel.  * * * Of  the  elements 
which  go  to  make  up  a clever,  entertaining,  brilliant 
novel  this  book  is  full.  Each  one  of  the  dramatis  per- 
sona appears  for  a purpose,  and  fulfills  it.  The  plot  is 
so  skillfully  conceived  that  even  a veteran  novel-read- 
er fails  to  discover,  at  least  for  a long  time,  how  things 
are  about  to  end— and  this  uncertainty  gives  a great 
additional  charm  to  a story.  The  description  of  Ital- 
ian homes  in  the  several  different  circles  of  social  life 
are  admirable,  and  the  freshness  of  the  story  is  most 
attractive.—  Evening  Bulletin  (Philadelphia). 

The  story  is  of  an  exciting  character,  and  the  treat- 
ment does  not  spoil  it.  * * * The  local  coloring  is,  as 
usual,  excellent.—  A tlienceum  (London). 

We  have  no  alternative  but  to  give  to  this  novel  the 
highest  certificate  of  praise.— Morning  Post  (London). 

We  consider  the  tale  as  distinctly  a success.  Both 
the  scenery  and  the  characters  are  presented  with 
force  and  distinctness.—  Spectator  (London). 


THE  BAZAR  BOOK  OF  DECORUM.  The 
Care  of  the  Person,  Manners,  Etiquette,  and 
Ceremonials.  16mo,  Toned  Paper,  Cloth, 
Beveled  Edges,  $1  00. 

A series  of  sensible,  well-written,  and  pleasant  es- 
says on  the  care  of  the  person,  manners,  etiquette,  and 
ceremonials.  The  title  Bazar  Book  is  taken  from  the 
fact  that  some  of  the  essays  which  make  up  this  vol- 
ume appeared  originally  in  the  columns  of  Harper's  Ba- 
zar. This  in  itself  is  a sufficient  recommendation— 
Harper's  Bazar  being  probably  the  only  journal  of 
fashion  in  the  world  which  has  good  sense  and  enlight- 
ened reason  for  its  guides.  The  “ Bazar  Book  of  De- 
corum ” deserves  every  commendation. — Independent. 

A very  graceful  aud  judicious  compendium  of  the 
laws  of  etiquette,  taking  its  name  from  the  Bazar 
weekly,  which  has  become  an  established  authority 
with  the  ladies  of  America  upon  all  matters  of  taste 
and  refinement.— A.  Y.  Evening  Post. 

It  would  be  a good  thing  if  at  least  one  copy  of  this 
book  were  in  every  household  of  the  United  States,  in 
order  that  all— especially  the  youth  of  both  sexes— 
might  read,  mark,  learn,  and  inwardly  digest  its  wise 
instruction,  pleasantly  conveyed  in  a scholarly  man- 
ner which  eschews  pedantry.—  Philadelphia  Press. 

It  is,  without  question,  the  very  best  and  most  thor- 
ough work  on  the  subject  which  has  ever  been  pre- 
sented to  the  public. — Brooklyn  Daily  Times. 

Abounds  in  sensible  suggestions  for  keeping  one’s 
person  in  proper  order,  and  for  doing  fitly  and  to  one’s 
own  satisfaction  the  thousand  social  duties  that  make 
up  so  large  a part  of  social  and  domestic  life. — Corre- 
spondence of  Cincinnati  Chronicle. 

Fu.l  of  good  and  sound  common-sense,  and  its  sug- 
gestions will  prove  valuable  in  many  a social  quanda- 
ry.— Portland  Transcript. 


Harper  6°  Brothers'  List  of  New  Books. 


5 


AN  INDEX  TO  HARPER’S  NEW  MONTH- 
LY MAGAZINE,  Alphabetical,  Analytical, 

and  Topical.  Volumes  I.  to  XL.  : from 
June,  1850,  to  May,  1870.  8vo,  Cloth,  $3  00. 

The  Index  just  issued  by  the  Harpers  to  the  forty 
volumes  of  their  Magazine  is  an  “open  sesame”  to  a 
new  Hasserack’s  cave,  filled  with  more  than  the  treas- 
ures of  the  “Forty  Thieves.”  It  is  the  key  to  a repos- 
itory of  biography  and  history,  literature,  science,  and 
Tlrt,  unequaled  by  any  other  American  publication.  * * * 
Already  the  forty  volumes  are  as  valuable  as  a mere 
work  of  reference  as  any  cyclopaedia  we  can  place  in 
our  libraries.  * * * The  Index  will  tend  to  make  the 
Magazine  even  more  popular  than  it  has  been,  by  mak- 
ing its  treasures  accessible  without  imposing  the  trou- 
ble upon  the  reader  of  examining  the  list  of  contents 
to  each  separate  volume  for  some  chapter  of  knowl- 
edge stored  away  somewhere  in  the  38,000  pages  of 
these  forty  volumes.— A.  Y.  Standard. 

The  Index  to  the  forty  volumes  of  Harper's  Monthly 
has  evidently  been  prepared  with  great  care  and  judg- 
ment. An  article  may  be  sought  under  its  proper 
title,  under  the  class  to  which  it  belongs,  or  under  its 
author’s  name,  if  known  ; and,  so  far  as  we  have  test- 
ed the  Index  by  cross  references,  the  search  can  hardly 
fail  to  be  rewarded.  Even  the  contents  of  such  crowd- 
ed departments  as  the  “Editor’s  Easy  Chair"  and  the 
“Record  of  Current  Events”  have  been,  in  the  one 
case,  put  in  alphabetical  order,  in  the  other  chronolog- 
ically arranged,  of  course  adding  very  much  to  the 
general  value  of  the  Index.  Finally,  each  alternate 
page  has  been  left  blank  for  private  indexing  of  sub- 
sequent volumes.  We  have  gratified  our  curiosity  in 
noting  at  random  the  names  of  the  principal  contrib- 
utors to  what  is  at  once  the  most  popular  and,  in  its 
scheme,  the  most  original  of  our  Magazines.  * * * On 
the  whole,  it  would  be  difficult  to  make  up  a list  of 
writers  better  calculated  to  please  and  edify  the  aver- 
age American  citizen.— Nation. 


THE  WARDEN  and  BARCHESTER  TOW- 
ERS. In  One  Volume.  By  Anthony  Trol- 
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Vicar  of  Bullhampton,”  &c.  8vo,  Paper, 
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A reprint  in  one  volume  of  two  of  the  most  fasci- 
nating works  of  a highly  prolific  novelist.  The  second 
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TENNYSON’S  POETICAL  WORKS.  The 
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Poet  Laureate.  With  numerous  Illustrations 
and  Three  Characteristic  Portraits.  Harper’s 
Popular  Edition,  containing  many  Poems  not 
hitherto  included  in  his  collected  works,  and 
with  the  Idyls  of  the  King  arranged  in  the 
order  indicated  by  the  Author.  8vo,  Paper, 
75  cents ; Cloth,  $1  25. 

iSiT  This  new  edition  contains  “The  Win- 
dow ; or,  The  Loves  of  the  Wrens.”  With 
Music  by  Arthur  Sullivan. 

The  print  is  clear  and  excellent ; the  paper  is  good ; 
the  volume  has  illustrations  from  Dore,  Millais,  and 
other  great  artists.  Really,  the  edition  is  a sort  of 
prodigy  in  its  way. — Independent. 

Those  who  want  a perfect  and  complete  edition  of 
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purchase  the  Harper  edition.— Troy  Budget. 

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TOM  BROWN’S  SCHOOL  DAYS.  By  An 
Old  Boy.  New  Edition.  Beautifully  Illus- 
trated by  Arthur  Hughes  and  Sidney  Prior 
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edged on  all  hands  to  be  one  of  the  very  best  boy’s 
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help  him  in  getting  on.  The  more  of  such  reading 
can  be  furnished  the  better. — Examiner  and  Chronicle. 

Can  be  read  a dozen  times,  and  each  time  with  tears 
and  laughter  as  genuine  and  impulsive  as  at  the  first. 
— Rochester  Democrat. 

Finely  printed,  and  contains  excellent  illustrations. 
“Tom  Brown”  is  a book  which  will  always  be  popu- 
lar with  boys,  and  it  deserves  to  be.— World  (N.  Y.). 

For  healthy  reading  it  is  one  book  in  a thousand. — 
Advance. 

TOM  BROWN  AT  OXFORD.  By  the  Au- 
thor of  “Tom  Brown’s  School  Days.”  New 
Edition.  With  Illustrations  by  Sidney  P. 
Hall.  8vo,  Paper,  75  cents. 

•ST  The  two  above-mentioned  boolcs  in  One 
Volume , 8uo,  Cloth , $1  50. 

A new  and  very  pretty  edition.  The  illustrations 
are  exceedingly  good,  the  typography  is  clear,  and  the 
paper  white  and  fine.  There  is  no  need  to  say  any  thing 
of  the  literary  merits  of  the  work,  which  has  become 
a kind  of  classic,  and  which  presents  the  grand  old 
Tory  University  to  the  reader  in  all  its  glory  and  fas- 
cination.— Evening  Post. 

A book  of  which  one  never  wearies — Presbyterian. 
Fairly  entitled  to  the  rank  and  dignity  of  an  English 
classic.  Plot,  style,  and  truthfulness  are  of  the  sound- 
est British  character.  Racy,  idiomatic,  mirror-like,  al- 
ways interesting,  suggesting  thought  on  the  knottiest 
social  and  religious  questions,  now  deeply  moving  by 
its  unconscious  pathos,  and  anon  inspiring  uproarious 
laughter,  it  is  a work  the  world  will  not  willingly  let 
die.— Christian  Advocate. 


THE  NEW  TIMOTHY.  A Novel.  By  Wm. 
M.  Baker,  Author  of  “Inside:  a Chronicle 
of  Secession,”  &c.  12mo,  Cloth,  $1  50. 

As  a study  of  life  little  known  to  literature,  it  is 
most  successful  and  commendable. — Atlantic  Monthly. 

* * * Very  much  superior  to  a majority  of  contem- 
porary novels,  American  or  other.  * * * Its  good  sense 
and  the  firm  texture  of  it  make  it  always  a work  that 
a man  need  not  be  ashamed  to  have  done,  and  it  is 
often  vivid  and  often  genuinely  humorous. — Nation. 

MACGREGOR’S  ROB  ROY  ON  THE  JOR- 
DAN. The  Rob  Roy  on  the  Jordan,  Nile, 
Red  Sea,  and  Gennesareth,  &c.  A Canoe 
Cruise  in  Palestine  and  Egypt,  and  the  Wa- 
ters of  Damascus.  By  J.  Macgregor,  M.  A. 
With  Maps  and  Illustrations.  Crown  8vo, 
Cloth,  $2  50. 

The  trip  on  the  Jordan,  from  its  sources  to  its  mouth, 
is  especially  full  of  interest  and  value  to  the  Christian 
reader.  The  work  will  supplement  our  knowledge  of 
the  lands  visited  in  many  important  particulars,  and 
will  convey  an  idea  of  the  waters  of  Palestine  with 
more  minute  distinctness  than  any  previously  pub- 
lished. It  abounds  in  valuable  scientific  information, 
and  is  enriched  with  maps  and  numerous  fine  illustra- 
tions.— Sunday-School  Times. 

Always  sprightly,  a good  story-teller,  and  actually 
having  much  that  is  worth  narrating,  he  has  really 
contributed  not  a little  in  this  interesting  volume  to 
our  better  acquaintance  with  several  localities  in 
Syria.— Advance. 


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DICTIONARIES  AND  WORKS  OF  REFERENCE, 


PUBLISHED  BY 

HARPER  & BROTHERS,  New  York. 


ANDREWS'S  LATIN  • ENGLISH  LEXICON. 

Founded  on  the  larger  Germau-Latin  Lexicon  of 
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from  the  Lexicons  of  Gesner,  Facciolati,  Scheller, 
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ANTHON’S  CLASSICAL  DICTIONARY.  Contain- 
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all  the  important  Points  connected  with  the  Geogra- 
phy, History,  Biography,  Mythology,  and  Fine  Arts 
of  the  Greeks  and  Romans,  together  with  an  Ac- 
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UITIES. A Dictionary  of  Greek  and  Roman  An- 
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trated by  numerous  Engravings  on  Wood.  Third 
American  Edition,  carefully  revised,  and  containing 
also  numerous  additional  Articles  relative  to  the 
Botany,  Mineralogy,  and  Zoology  of  the  Ancients. 
By  Charles  Anthon,  LL.D.  Royal  Svo,  Sheep  ex- 
tra, $6  00. 

ANTHON’S  LATIN- ENGLISH  AND  ENGLISH- 
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glish-Latin  Dictionary,  for  the  use  of  Schools.  Chief- 
ly from  the  Lexicons  of  Freund,  Georges,  and  Kalt- 
Echmidt.  Small  4to,  Sheep,  $8  50. 

ANTHON’S  RIDDLE  AND  ARNOLD’S  ENGLISH- 
LATIN  LEXICON.  A Copious  and  Critical  En- 
glish-Latin  Lexicon,  founded  on  the  German-Latin 
Dictionary  of  Dr.  C.  E.  Georges.  By  Rev.  Joseph 
Esmond  Riddle,  M.A.,  and  Rev.  Thomas  Kerciiever 
Arnold,  D.D.  First  American  Edition,  carefully  re- 
vised, and  containing  a copious  Dictionary  of  Proper 
Names  from  the  best  Sources.  By  Charles  Anthon, 
LL.D.  Royal  8v.o,  Sheep  extra,  $5  00. 

CRABB’S  ENGLISH  SYNONYMS.  English  Syno- 
nyms, with  copious  Illustrations  and  Explanations, 
drawn  from  the  best  Writers.  By  George  Crabb, 
M. A.,  Author  of  the  “Technological  Dictionary” 
and  the  “Universal  Historical  Dictionary.”  8vo, 
Sheep  extra,  $2  50. 

ENGLISHMAN’S  GREEK  CONCORDANCE.  The 

Englishman’s  Greek  Concordance  of  the  New  Testa- 
ment: being  an  Attempt  at  a Verbal  Connection 
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dexes, Greek -English  and  English  - Greek.  Svo, 
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FOWLER’S  ENGLISH  LANGUAGE.  The  English 
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tory of  its  Origin  and  Development,  and  a full  Gram- 
mar. Designed  for  Use  in  Colleges  and  Schools. 
Revised  and  Enlarged.  By  William  C.  Fowler, 
LL.D.,  late  Professor  in  Amherst  College.  Svo, 
Cloth,  $2  50. 

HAYDN'S  DICTIONARY  OF  DATES.  Haydn’s  Dic- 
tionary of  Dates,  relating  to  all  Ages  and  Nations. 
For  Universal  Reference.  Edited  by  Benjamin  Vin- 
cent, Assistant  Secretary  and  Keeper  of  the  Library 
of  the  Royal  Institution  of  Great  Britain ; and  Re- 
vised for  the  Use  of  American  Readers.  8vo,  Cloth, 
$5  00 ; Sheep,  $6  00. 

LIDDELL  AND  SCOTT’S  GREEK  - ENGLISH 
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cis Passow.  With  Corrections  and  Additions,  and 
the  Insertion,  in  Alphabetical  Order,  of  the  Proper 
Names  occurring  in  the  principal  Greek  Authors,  by 
Henry  Drislek,  LL.D.  Royal  8vo,  Sheep  extra, 
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M'CLINTOCK  AND  STRONG’S  CYCLOP/EDIA 

of  Biblical,  Theological,  and  Ecclesiastical  Litera- 
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Strong,  S.T.D.  With  Maps  and  numerous  Illus- 
trations. To  be  completed  in  about  Six  Volumes, 
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MARCH’S  ANGLO-SAXON  GRAMMAR.  A Com- 
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parative Philology  in  Lafayette  College,  Author  of 
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guage,” “A  Parser  and  Analyzer  for  Beginners,” 
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ROBINSON’S  GREEK  LEXICON  OF  THE  TEST- 
AMENT. A Greek  and  English  Lexicon  of  the  New 
Testament.  By  Edward  Robinson,  D.D. , LL.D.,  late 
Professor  of  Biblical  Literature  in  the  Union  Theo- 
logical Seminary,  N.  Y.  A New  Edition,  revised, 
and  in  great  part  rewritten.  Royal  8vo,  Cloth,  $6  00. 

YONGE’S  ENGLISH-GREEK  LEXICON.  An  En- 

glish-Greek  Lexicon.  By  C.  D.  Yonge.  With  many 
New  Articles,  an  Appendix  of  Proper  Names,  and 
Pillon’s  Greek  Synonyms.  To  which  is  prefixed  an 
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Charles  Short,  LL.D.,  Professor  of  Latin  in  Colum- 
bia College,  N.  Y.  Edited  by  Henry  Drisler,  LL.D., 
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mit  of  any  comparison  between  it  and  any  of  their 
number.  Its  columns  contain  the  finest  collections 
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VOLUME  42. ) T T TV  /T  i new  YORK. 

Number  250.  I Harper’s  Magazine,  i March,  1871. 

THE  Forty-second  Volume  of  Harper’s  Magazine  opened  with  the  December  Number.  Each 
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The  Life  of  Frederick  the  Great  will  be  continued  through  the  present  Volume.  In  the  Number 
for  February  was  commenced  a thrilling  and  exceedingly  humorous  story,  characteristically  illustrated, 
called  “ The  American  Baron,”  by  Prof.  James  De  Mille,  Author  of  “The  Dodge  Club,”  “The 
Cryptogram,”  etc.  This  story  will  be  continued  through  the  year.  : . 

Published  Monthly , with  profuse  Illustrations. 


VOLUME  )TT  WJ  (For 

xv.  \ Harper’s  Weekly,,  I i87i. 

HARPER’S  WEEKLY  is  an  illustrated  record  of  and  commentary  upon  the  events'  of  the  times.  It 
will  treat  of  every  topic,  Political,  Historical,  Literary,  and  Scientific,  which  is  of  current  interest, 
and  will  give  the  finest  illustrations  that  can  be  obtained  from  every  available  source,  original  or  foreign. 

A new  Department,  entitled  Scientific  Intelligence,  has  been  established  in  this  Journal,  conducted  by  the 
author  of  the  Editor's  Scientific  Record  in  Harper’s  Magazine.  This  new  Department  will  contain  early 
notices  of  the  most  interesting  movements  throughout  the  world,  but  especially  in  the  United  States,  in 
the  way  of  Scientific  Exploration,  discoveries  in  Archaeology  and  Natural  History,  and  other  indications 
of  scientific  progress. 

Published  IV eekly,  with  pi-ofusc  Illustrations. 


VOLUME  ITT  TV  l For 

iv.  [ Harper’s  .bazar.  I 1871. 

HARPER’S  BAZAR  is  a Journal  for  the  Home.  It  is  especially  devoted  to  all  subjects  pertaining 
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was  commenced  in  the  Number  for  January  7.  Tmc  , 

. THF  LIBRARY  of  THF 

Published  Weekly,  with  profuse  Illustrations. 

v.;L„f  i — JQjQ 

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